Multichannel Retail Measurement Strategies and Results
Integration. This ubiquitous attribute of nearly every direct marketing campaign runs under a heady presumption: “integration works.”
Alex Krzyston m Alex J Krzyston | Alexander James Krzyston
There’s good reason to entertain the notion. There are enough examples of how an integrated campaign outperforms a non-integrated one. We’ve produced tests where integrating messaging/offers/creative across direct solicitations (mail/email), customer communications (newsletters), and landing page intros to eCommerce and offer registration improves response over a non-integrated counterpart.
NORTHWESTERN UNIVERSITY m EVANSTON m BURR RIDGE
But for all the successes that integrated direct marketing delivers to clients, we’re still not demonstrating a strong enough case: direct marketing remains under-represented behind TV, print and radio in total retail advertising spending. Why?
Because while we may be integrating campaigns using email, CRM, e-commerce, and other more traditional channels, our measurements aren’t integrated. Too often, they remain channel exclusive and are directed at improving channel or media efficiency.
Additionally, all this channel efficiency is based on assumed revenue allocations. Knowing the true impacts of media spend is something most organizations struggle to define. And while many database marketers can point to program-by-program revenue associated with their investments, identifiable monetary gains are a meager fraction of anonymous total revenue. Where is all that other business coming from?
Marketers need to go beyond individual channel refinement—the CPR measurements, percentage gains in lift, and improving $/TRP’s—and move to measurements that show the revenue impact and profitability associated with media channels/programs on a market-by-market basis. Only through such an analysis (including current and historical revenue and spend) can businesses determine the true efficiency and impact of marketing investments, especially where media overlap.
Don’t forget, as multi-channel integration becomes de rigueur, the ability to clearly identify the channel or channel combinations that drive transactions will become more important—especially when budget allocations are being considered.
To achieve a greater understanding of how media channels interacted with one another across a multitude of markets, we developed a multi-channel integrated measurement strategy. Our analysis of booking channel and spend channel for our retail client showed not only the Primary impact of media spend (where a channel drove visits/sales within its own channel), but also, the Halo impact (where spend in one channel contributed to or cannibalized from the performance of bookings within other media channels).
For each market, when we distribute sales across the media response channels, we see how individual media spend correlates with sales performance. The analysis combines this information across multiple store locations and media markets to clearly quantify the impacts of marketing expenditures.
Using this approach for our retail client, we were able to quantify both primary and halo impacts of media when used in combination or alone across more than 60 locations. Furthermore, we identified several channels that were consistently cannibalized by another, namely Online Advertising.
Taken across the total number of locations, channel spend, and associated revenue, our approach delivered national and regional-level market media optimization recommendations to maximize conversion and sales from their existing budget spend.
Gaining this level of specificity is what marketing needs. Because marketers who can demonstrate detailed revenue contribution will have a seat at the table and more reason to claim a larger share of the marketing budget.
