Background
A large North American multi-brand retailer’s marketing strategy was heavily skewed towards paid search, conditioning consumers to expect discounts and making it difficult to build long-term brand value. This was a significant issue, as brand tracking data revealed its key brands lacked stature and were failing to connect with younger demographics.
The challenge was compounded by significant market volatility. High inflation created a confusing business picture, artificially boosting revenue while depressing essential store traffic, while a consumer shift towards a new, more affordable product category threatened traditional sales models.
This complex environment led to scrutiny from senior finance stakeholders, including the VP of Finance, who required concrete evidence to justify any marketing spend not tied directly to short-term sales.
Solution
We implemented a comprehensive, unified measurement program built around advanced marketing mix modeling (MMM) that included several proprietary methodologies:
- Sensor™ provides granular, near-time insights that are privacy compliant and enable optimization at the tactical level across online and offline channels.
- Unobserved Component Modeling (UCM) distinguishes between short-term sales activation and the long-term brand equity impact to help prove the value of upper-funnel investment to skeptical stakeholders.
- Integrated Marketing Response (IMR) measures marketing’s impact across the entire customer journey.
- Scenario Planning and Optimization (SPO) tools empower marketers to build and pressure-test different investment strategies, creating data-informed plans that align with business goals.
Recognizing the unprecedented pace of change, we advised the retailer to shift from an annual MMM cadence to a quarterly one to better track and respond to market dynamics.
Results
In the first quarter, the program identified an additional $23 million in marketing-driven revenue that could be unlocked through media optimization. Armed with this evidence, the client’s media agency used insights from Sensor™ to reallocate budget away from an over-saturated paid search program and into brand-building display and upper-funnel channels.
The combination of quarterly reporting and UCM analysis has provided the marketing team with the robust evidence required to justify its evolving strategy to the VP of Finance, demonstrating how investing in the brand today is essential for connecting with younger audiences and driving sustainable, long-term growth.
marketing-driven revenue identified
