Each year enormous sums are invested in marketing and advertising efforts. Advertising channels have become increasingly interwoven. Surely, nobody considers offline and online marketing strategies separately anymore. In fact multiple studies have proven that different advertising channels influence each other and reinforce their effect in combination. Considering only individual measures is therefore not only insufficient in terms of budget allocation. If you deny the link between different channels, it will lead to substantial disadvantages in terms of efficiency.
QUISMA – the agency for online performance marketing knows the importance of a holistic analysis and pursues a comprehensive approach going beyond online activities. When optimising a company’s advertising budget, QUISMA therefore takes all marketing measures into account to optimise the allocation. This approach is based on the “customer journey”, which depicts the path the customer takes across all channels considering all “touchpoints”: information gathering, decision making process, and purchase.
The customer journey analysis is a proven method identifying an optimal marketing budget allocation across channels which will increase sales and decrease advertising costs.
In order to determine which channels customers use to find products, technological tools are commonly used to trace the user path. Analysing the customer journey using this approach however has its limitations which in the worst case hinders actual mapping of the customer’s path.
The limits of classical customer journey analysis
When observing the customers online journeys, all agencies working in online marketing currently use cross-channel tracking systems. One of the biggest challenges for these systems is device change. If users use different devices when researching and buying products this cannot be taken into consideration. This is why the customer journey very often seems to have “blank spots” which makes an ideal budget allocation more difficult or even impossible at times.
Another challenge is when users regularly delete their cookies. Only the activities after deletion are identifiable. External factors such as offline marketing activities in print and on TV, special offers or seasonal variations are not recorded by tracking systems and thus can also not be taken into account in the analysis. Similarly, the customer journey is limited if more than one provider tracks the online marketing activities.
Sales modelling advantage
Sales Modelling is an approach supplemental to technical customer journey analysis which avoids the mentioned restrictions and enables true mapping of the customer journey across all channels considering all relevant factors. This method is an approach known from classical advertising research.
The method used by QUISMA includes a range of important factors such as sales, advertising expenditures, seasonal effects, and price – elements that are crucial for optimal budget allocation. The actual sales and data gathered from all marketing activities are put into relation to learn how they influence each other. The greatest advantage compared to technological tracking is that it shows the impact of offline activities (TV, print, etc.) and external factors had on generated sales.
In addition, modelling allows projections for the future based on historical data. When the influence of individual factors on sales is determined, it can be calculated how the budget should be allocated in the future. The modelling also provides a clear insight into how each change of individual factors can affect sales. Advertising companies can use modelling as a tool to effectively plan future marketing decisions and allocate budgets to an optimum level.
How different channels influence each other
This method is able to give recommendations on how to spend marketing budgets efficiently because it unveils complex relationships which are difficult to identify through simple descriptive analyses or conventional tools and approaches. Due to its advantages it is commonly used in classic advertising as it proved to be more efficient to strategically plan budgets.
QUISMA has developed its own modelling analysis for the online sector. The goal is to depict how all digital and offline channels influence one another to facilitate and optimise investments.
To cut a long story short, the modelling answers the following questions when it comes to impact and budget:
- What is the return on investment of my online and offline marketing activities?
- Which of my marketing channels offer the greatest potential for growth?
- How do I allocate my marketing budget optimally to the different media?
- How does classical advertising affect activities in my online shop?
Especially for advertisers who invest large sums in online advertising it is highly important to allocate their marketing budgets efficiently to digital channels. Online technical tracking however has its limitations particularly when it comes to big marketing budgets that usually involve offline channels which can’t be depicted by technological tracking.
The modelling method overcomes these hurdles and considers online and offline marketing activities and their effect on generated sales in each channel and with regard to external factors.
This makes modelling the most sophisticated method in the area of advertising research which now is available for the online business as well. Despite the fact that it might be a more costly, tedious way to analyse the customer journey compared to technological tracking the outcome speaks volumes: budgets that are allocated to an optimum to accompany the customer’s journey on the Internet.