Last month’s data is yesterday’s news, says Michał Kuspit. Today media agencies must constantly monitor touchpoints and predict consumer behaviours as they move to become business partners to their clients
It’s an interesting time for marketers. Thanks to the rapidly changing world and advancements in technology, our capabilities to communicate with customers, understand what they want and fulfill their needs are better than ever. However, if we want to seize those opportunities, we need to evolve the way we think about working with each other. Media agencies are becoming the leaders in driving that change.
Traditionally, the role of media agencies has been to drive mediabuying value for their clients. This led to the formation of the agency holding companies that we know today, with the aim of leveraging economies of scale to deliver to clients. However, in this age of automation, data and economic uncertainty, media-buying value is no longer enough. To compete in this environment, against new competitors, agencies are having to progress in shifting the conversation away from cost and reach and towards tangible financial returns.
We are already quite far along that road. Thanks to marketing mix modelling we have an accurate understanding of the various element that affect sales and other business key performance indicators we wish to track in order to measure the exact impact these elements have on returns. The implications of these insights are profound, as this information enables agencies to measure the impact of their activity against client business objectives. This granular visibility across these elements also enables agencies to identify potential challenges and bottlenecks across the entire customer journey, allowing optimisation across all touchpoints, not just media.
These insights drive a shift in conversation, allowing agencies to do more than simple media buyers and become business partners with our clients, working in tandem to drive the business forward.
However, there are gaps in the current offering and, as a result, marketing mix modelling cannot serve as the ultimate tool for planning communications. The biggest issue is the time factor. It takes at least two months to run a study, plus additional time to gather and clean all the data. In practice,those studies are being conducted once or twice a year at best and the results are often lagged. As a result we are seeing this kind of modelling more suited for strategic planning rather than more dynamic optimisation of touchpoints, and its value here is becoming increasingly limited due to the constant changes driven by digital.
We should all learn from modern digital media planning. Each touchpoint is constantly evaluated against its performance so that the message is served where and when it works best. This approach could be extended to other channels as well.
Applying such an approach gives us opportunity to use those sales models more dynamically. Imagine a scenario where each week’s latest sales data is being benchmarked against a model, providing an instant feedback on performance. This means that if a new TV creative is working much better than average, we can act immediately. If the agency can upweight weekly intensities on that campaign or quickly launch it as a pre-roll on YouTube, this boost of effectiveness can be used to generate additional revenue.
Let’s go one more step forward. Thanks to modern machine-learning techniques, we can build models that will predict demand for weeks forward. Knowing ahead that there will be more people entering the category will allow brands to cut a bigger slice of this growing pie. Those few weeks can be used to launch a tactical campaign or an in-store promo.
This is starting to happen. However, for it to become standard practice marketers and agencies need to evolve their relationships. This agile approach to planning requires agencies to change how they collect and work with data. Building data warehouses still won’t do the job by itself, unless supported with the right talent and leadership. Without this shift, agile planning becomes just a buzzword on a PowerPoint slide.
At the same time, marketers need to embrace this process and trust their agencies with more than just their TV discounts. This will allow both parties to make the best of their resources (because yes, data is still a valuable resource) not only once or twice a year when strategies are being built, but to make informed decisions on a daily basis. Through this, agencies are one step closer to becoming partners in clients’ businesses.
Michał Kuspit is the Data & analytics director at Zenith