Oli Dodds, Media Manager at Realtime Agency, discusses how making smarter use of measurement to inform media planning can make social media marketing strategies more efficient and effective, in turn reducing the perceived need to cut costs and marketing investment.
In the face of a predicted recession, companies are scrambling to maintain revenue growth and protect their bottom line. And while marketing spend may be an easy target for cost-cutting measures, history has shown that this approach can be costly and detrimental to a company's long-term success. In fact, a recent Nielsen survey found that companies that reduced their marketing spend during economic downturns saw an average of two per cent long-term revenue loss each quarter, with recovery taking up to three to five years.
In response, CMOs are focusing on optimising their media mix to get the most out of their marketing budget. According to Bain & Company, brands that prepared for economic downswings saw an average of 17 per cent annual growth, while McGraw Hill's study showed that companies that maintained or increased their marketing budgets during recessions saw an average of a 256 per cent increase in sales.
To achieve this kind of success, marketers must prioritise efficiency and effectiveness across their media mix. Rather than simply slashing entire channels or funnel tactics, marketers should focus on identifying areas where they can optimise their efforts. This may include reducing waste in adspend, refining targeting strategies and experimenting with new channels or tactics to find the most effective mix for their brand.
But how can marketers ensure they are making the right decisions when it comes to media mix? One answer is through measurement, specifically Marketing Mix Modeling (MMM). While many brands rely on Multi-Touch Attribution (MTA) to optimise their campaigns, this attribution type has been become somewhat less precise with the depreciation of cookies. Without cookies, ad platforms struggle to provide complete and accurate data on which tactics are driving key performance indicators (KPIs).
MMM, however, offers a comprehensive and precise view of campaign effectiveness by examining authentic revenue data and wide-ranging consumer trends to identify the channels and tactics responsible for success, providing a more accurate and long-term perspective. By leveraging MMM, marketers can gain an improved comprehension of which channels are genuinely contributing to the business' profits, resulting in better-informed, data-driven decisions. That said, it's essential not to disregard MTA, as it remains valuable for real-time optimisation and can function as a helpful guide to supplement the insights gained from MMM.
For instance, let's examine the case of a home tech client who tracks sales through both Google Analytics and Meta (MTA). Although these platforms offer valuable insights, the accuracy of the data provided can be uncertain. Relying solely on these metrics can result in less-than-ideal spending decisions. In this scenario, Google Analytics data indicates that paid social is responsible for a small percentage of sales. However, after incorporating MMM, we discovered that paid social actually generated a 25 per cent higher return on adspend (ROAS) compared to search. Without leveraging MMM to verify this data, we would have missed out on a substantial portion of our client's ad revenue.
In conclusion, with a recession looming, it's more important than ever for CMOs to optimise their marketing budgets and prioritise efficiency and effectiveness across their media mix. By utilising MMM alongside MTA, marketers can gain a more comprehensive understanding of their campaign's performance and make informed, data-driven decisions that drive long-term growth and success.
Oli Dodds
Media Manager
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