Marketing Tips Biography
The second limitation of marketing mix models comes into play when advertisers attempt to use these models to determine the best media allocation across different media types. The traditional use of MMM's to compare money spent on TV versus money spent on couponing was relatively valid in that both TV commercials and the appearance of coupons (for example, in a FSI run in a newspaper) were both quite time specific. However, as the use of these models has been expanded into comparisons across a wider range of media types, extreme caution should be used.
Even with traditional media such as magazine advertising, the use of MMM's to compare results across media can be problematic; while the modelers overlay models of the 'typical' viewing curves of monthly magazines, these lack in precision, and thus introduce additional variability into the equation. Thus, comparisons of the effectiveness of running a TV commercial versus the effectiveness of running a magazine ad would be biased in favor of TV, with its greater precision of measurement. As new new forms of media proliferate, these limitations become even more important to consider if MMM's are to be used in attempts to quantify their effectiveness. For example, Sponsorship Marketing, Sports Affinity Marketing, Viral Marketing, Blog Marketing and Mobile Marketing all vary in terms of the time-specificity of exposure.
Further, most approaches to marketing-mix models try to include all marketing activities in aggregate at the national or regional level, but to the extent that various tactics are targeted to different demographic consumer groups, their impact may be lost. For example, Mountain Dew sponsorhip of NASCAR may be targeted to NASCAR fans, which may include multiple age groups, but Mountain Dew advertising on gaming blogs may be targeted to the Gen Y population. Both of these tactics may be highly effective within the corresponding demographic groups but, when included in aggregate in a national or regional marketing-mix model, may come up as ineffective.
Aggregation bias, along with issues relating to variations in the time-specific natures of different media, pose serious problems when these models are used in ways beyond those for which they were originally designed. As media become even more fragmented, it is critical that these issues are taken into account if marketing-mix models are used to judge the relative effectiveness of different media and tactics.
Marketing-mix models use historical performance to evaulate marketing performance and so are not an effective tool to manage marketing investments for new products. This is because the relatively short history of new products make marketing-mix results unstable. Also relationship between marketing and sales may be radically different in the launch and stable periods. For example the initial performance of Coke Zero was really poor and showed low advertising elasticity. In spite of this Coke increased its media spend, with an improved strategy and radically improved its performance resulting in advertising effectiveness that is probably several times the effectiveness during the launch period. A typical marketing-mix model would have recommended cutting media spend and instead resorting to heavy price discounting.
The second limitation of marketing mix models comes into play when advertisers attempt to use these models to determine the best media allocation across different media types. The traditional use of MMM's to compare money spent on TV versus money spent on couponing was relatively valid in that both TV commercials and the appearance of coupons (for example, in a FSI run in a newspaper) were both quite time specific. However, as the use of these models has been expanded into comparisons across a wider range of media types, extreme caution should be used.
Even with traditional media such as magazine advertising, the use of MMM's to compare results across media can be problematic; while the modelers overlay models of the 'typical' viewing curves of monthly magazines, these lack in precision, and thus introduce additional variability into the equation. Thus, comparisons of the effectiveness of running a TV commercial versus the effectiveness of running a magazine ad would be biased in favor of TV, with its greater precision of measurement. As new new forms of media proliferate, these limitations become even more important to consider if MMM's are to be used in attempts to quantify their effectiveness. For example, Sponsorship Marketing, Sports Affinity Marketing, Viral Marketing, Blog Marketing and Mobile Marketing all vary in terms of the time-specificity of exposure.
Further, most approaches to marketing-mix models try to include all marketing activities in aggregate at the national or regional level, but to the extent that various tactics are targeted to different demographic consumer groups, their impact may be lost. For example, Mountain Dew sponsorhip of NASCAR may be targeted to NASCAR fans, which may include multiple age groups, but Mountain Dew advertising on gaming blogs may be targeted to the Gen Y population. Both of these tactics may be highly effective within the corresponding demographic groups but, when included in aggregate in a national or regional marketing-mix model, may come up as ineffective.
Aggregation bias, along with issues relating to variations in the time-specific natures of different media, pose serious problems when these models are used in ways beyond those for which they were originally designed. As media become even more fragmented, it is critical that these issues are taken into account if marketing-mix models are used to judge the relative effectiveness of different media and tactics.
Marketing-mix models use historical performance to evaulate marketing performance and so are not an effective tool to manage marketing investments for new products. This is because the relatively short history of new products make marketing-mix results unstable. Also relationship between marketing and sales may be radically different in the launch and stable periods. For example the initial performance of Coke Zero was really poor and showed low advertising elasticity. In spite of this Coke increased its media spend, with an improved strategy and radically improved its performance resulting in advertising effectiveness that is probably several times the effectiveness during the launch period. A typical marketing-mix model would have recommended cutting media spend and instead resorting to heavy price discounting.
Marketing Tips
Marketing Tips
Marketing Tips
Marketing Tips
Marketing Tips
Marketing Tips
Marketing Tips
Marketing Tips
Marketing Tips
Marketing Tips
Marketing Tips
Marketing Tips
Marketing Tips
Marketing Tips
Marketing Tips
Marketing Tips
Marketing Tips
Marketing Tips
Marketing Tips
Marketing Tips
I find this site and article so nice because it carry's lot of information and updates on Marketing Tips. I want to say a big thank you for sharing this article. I should consider posting an article niche on my website @tecteem also.
ReplyDelete