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THE EXPLOSION OF MEDIA AND CHANNEL CHOICES makes it difficult to decide which advertising media to choose and how much to spend on each. Effectiveness is easy to measure for some media and impossible for others -- and costs varies widely. |
WHAT IS A CHANNEL AND MEDIA MERIT REPORT?
In response to these challenges, Management Analytics Group has developed a new data-driven tool called a Media Merit Report. The report displays the Lifetime Value of the customer segments split out by each channel that can be associated with a customer's behavior.
The insights provided by a Media Merit Report allow a marketer to identify the channel most likely to maximize profits and know how much they can afford to spend on that channel. You can read more about the importance of this report from Acquisition Costs Across Different Media.
WHO CAN USE A CHANNEL AND MEDIA MERIT REPORT?
The Channel And Media Merit Report is useful to companies that capture information about their customers’ behavior (what they bought, when and for how much). This report also requires that customer behavior be linked to the advertising or prospecting channel used. For some channels, this is easy. Websites, direct mail campaigns and catalogs channels provide this information . Other channels can be more challenging. Nonetheless, customer response can often be linked to a channel through a special offer, website landing page or unique order call-in number.
HOW DOES A CHANNEL AND MEDIA MERIT REPORT WORK?
First, a management analytics database (See What Is A Management Analytics Database) is used to link the names and addresses of a company’s current customers to the channel (source) through which the customer was contacted. The subsequent analysis then highlights differences between these customers in terms of profitability and other profile data. By itself, this information helps our clients communicate with their customers differently to improve their marketing Return On Investment (“ROI”).
Next, the Media Merit Report applies Lifetime Value ("LTV") calculations to each media channel and customer segment to determine which media channels result in positive LTV's for which customer segments. The end result is a graph that says it all, much like the one below:
Additional insights can come from using a data overlay is used to add demographic information to the management analytics database. (See Profiling - Seeing Customers in New Ways) Adding this data allows the Campaign And Media Merit Report to present a demographic/lifestyle “picture” of these current customers by channel that answers the following questions:
- Who are the current customers using each media channel?
- What is their socio-economic profile?
- Where are they physically located?
- What differences exist in media preference between profiles?
- What differences exist in customer segments and profiles between
media channels?
- What types of customers are acquired through each media channel?
- Which media channels produce the "high-profit" customers?
- What kind of media produces responses from the targeted profiles?
WHAT'S THE BOTTOM LINE?
Channel And Media Merit Reports allow you to achieve the highest possible ROI on your marketing investment by helping you select the most appropriate and effective media channels to communicate with your customers. This simplifies communications strategies, reduces total media costs and improves response rates and allows you to focus scarce advertising resources wisely.
Although they are complex, Channel And Media Merit Reports are not “rocket science.” They are, however, one of the most useful tools available to deal with the exploding complexity of making good media choices.
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