The digital and tech revolution pushed advertisers to market brands and services as cleverly and effectively as possible to consumers. The world of communications has become far more complex than it was 15 years ago. Media, communications and brand agencies need to find state-of-the-art solutions which will generate optimal ROI for client’s investments in marketing.
Still, many companies do not have a clear and continuous measurement of marketing results, brand trackers on a regular basis or sales and promo activity data which is shared with partners (agencies) orderly to be used in advanced econometrics models predicting consumer patterns of behavior, and could help in identifying the right channel allocation to maximize sales.
In the age of Instagram, websites, clicks, influencers, Netflix, and countless on-demand TV channels, the consumers purchase habits have changed completely. It has become increasingly harder to understand the consumers ‘journey’ to the chosen brand, to associate media spent with business results, and therefore to measure what the exact effect of marketing communications is.
Many companies, such as Adidas, Orange, Coca-Cola, Johnson&Johnson, have recently introduced the term “marketing effectiveness” into their vocabulary. The base concept behind marketing effectiveness is econometric modeling – demonstrating how much you should be spending on marketing and in what ways.
Adidas Global Media Director Simon Peel argues that quantifying marketing effectiveness is at the heart of Adidas’ success and core reason behind growing beyond the growth of the sportswear industry globally. Modeling helped Adidas realise that brand marketing is far more important for growth than specific product advertising, at a time when Adidas allocated only 23% of its marketing budget to brand image campaigns, compared to 77% on performance campaigns. Also, thanks to modeling Adidas understood that advertising specific product segments did not only push the sale of those same products. Last but not least, what may be obvious to many, TV, OOH and cinema advertising has been key for the growth of e-commerce sales for Adidas, even though that was not their primary goal until then.
These cutting-edge data science practices used by global corporations everywhere might be of interest for companies present in our region as well. However, in most media or creative agencies operating in the region, there are no experienced teams specialized in marketing effectiveness and modeling, or the application of data science for marketing purposes, nor do they have the sophisticated tools to deliver fast models. For these reasons, agencies and advertisers in the region are left with no choice but to rely on external and costly teams from their global agency hubs, out of reach for the average regional advertiser.
Polaris, a marketing sciences team within I&F Grupa, based in Belgrade, offers econometric insights as a key product based on sophisticated modeling tools of the IPG Mediabrands global network. Polaris team are local econometricians who combine their skills with professionals with years of regional advertising and communications expertise, combining data science and communications sciences in a fresh and unique way.
For The Coca-Cola Company, which already applies econometrics based knowledge in developed markets, Polaris team developed models for the Serbian market.
“Coca-Cola applies knowledge and principles from global markets and is therefore a master of global branding and marketing. UM, as a long-standing partner of The Coca-Cola Company, applies its global standards in all local activities adapting them to local circumstances and consumer preferences. Now, thanks to Polaris team, we have the opportunity to see the econometric perspective of media investments across the Coca-Cola portfolio of brands in our region and how to improve the ROI of each brand”, says Dubravka Urosevic , leader of the regional Coca-Cola team at the UM agency.
From the model we realized how important brand marketing is in relation to promotional activities and the essence of locally developed CRM communications. Now we are able to understand how much local influencer impact sales and whether there may be room to engage more of them. Also, we can clearly see the difference, ie. the effect of each individual digital channel on the weekly growth and sales of each of the brands analyzed.
“The models have made it clear to us what creative message “works”, ie. whether it had a greater or lesser effect on sales, as well as on what medium, or channel, the messages posted are most likely to be forgotten, and therefore, where the brand should be more relevant and personal in communication. In the end, the main conclusion is how the ROI of each media channel performs, as well as how can we be more effective in managing our marketing investments, and thus improve the overall ROI of each brand”, underlines Darko Stanojevic, Connections Manager Adriatics, The Coca-Cola Company.
Following the first econometric modeling projects, the Polaris team is preparing to expand its offer beyond the Balkans to the Nordic markets where the I&F Grupa operates, and through our long-standing partnership with McCann and IPG Mediabrands, we will work on models for larger markets such as Poland, UK … This is the New Year’s resolution and goal of the Polaris team in 2020.