Media Econometrics from a
Used Car Dealership
Project Objectives and Analysis Scope
1. Can we evaluate the effectiveness of multi-channel marketing in terms of units sold
and return on investment?
2. Can we provide insights in to future investment allocations across media that will
drive unit sales?
Identify and quantify the incremental impact of marketing on car sales across all
Determine the ROI of each marketing investment - online and offline.
Identify any synergies between key media channels.
Optimise media spending across channels to increase sales.
Used Car Sales & Seasonality
Dec 2011 Dec 2012
Seasonally recurring patterns are evident from the sales data. Sales plummet in December of
each year, only to rise again in January. March and August see an uplift in used sales due to
new car registration plate changes.
We undertook econometric media mix modelling to understand which marketing channels
have driven sales and ROI for Brand X over the last 3 years. The illustration below shows
the various data components that we included in our modelling of sales units*.
Digital Display (Premium & Network)
SEO: Unique Site Visitors
Radio, Press, Cinema, ITV Sponsorship
Gross Domestic Product (GDP)
(Oct 2010 –
Model Performance & Accuracy
Model R2 - This indicates a very high level of accuracy to the actual sales data.
Forecast R2 - This indicates accuracy of the forecast validation test.
Mean Absolute Percentage Error = 4.2% The average % variance between actual sales and modelled.
Our modeled sales maps and predicts actual brand X sales very well.
Annual Marketing Contributions
£1.4 million in marketing spend generated almost £17 million pounds in total revenue*. Total
marketing accounts for about 12% of total unit sales. Radio, Digital Network Display and TV
were the largest drivers of car sales.
Contribution* Average selling price is £9,600
Incremental Marketing Contributions by Month
Gains from recent campaigns
negated by competitive media.
Baseline Momentum (Seasonality and cumulative Brand Equity)
Comp 1 TV Comp 3 TV
Comp 2 TV Comp 4 TV Comp 5 TV
Marketing Spend Efficiency (ROI Per £1 Spent)*
Cinema, Digital Display and Sponsorship drive the most sales per £1 spent. Press activity
has been the least efficient and made a loss.
Brand X Marketing Response
The dilemma is that incremental spend will not generate much more growth. This is due
to the countervailing impact of competitive spend.
Current TCP Spend, £1,440,798
Light Saturation – Limited upside potential
Based on an average selling price of £9,600
Full Marketing Spend Optimisation
Sales Contribution Spend Sept 12 - Sept 13) Optimised
Press 33 £241,961 £96,784
Radio 434 £233,578 £607,303
Cinema 165 £21,663 £56,324
Sponsorship ITV 165 £165,000 £66,000
Branded TV 272 £355,341 £146,780
SEO 126 £61,200 £159,120
Paid Search 100 £287,662 £108,975
Display Network 411 £74,393 £193,422
Display Premium - £0 £0
The major investment increases should be directed towards radio, digital network
display & SEO. This plan will generate +1.6% increase in sales at constant spend.
This plan will
increase in sales
* Assuming constant GDP Growth of 0.4% YoY
Quantifying the potential gains from
1.6% gain in annual
= 232 more units
= £2,224,821 Add’ Revenue
* Average annual cars sold is 14,549 presuming a constant GDP Growth rate of 0.4%
Marketing Synergies: Radio and Digital Media*
Separate Impact Simultaneous Activation
lift in sales
Radio and Digital Media are most effective when executed together. There is about a
+43% synergy or additional lift due to simultaneous activation.
* Digital includes SEO, Display network banners & Paid Search
Key Insights and Suggestions
Much of Brand X’s media and marketing spend is neutralised by competitor spending.
The result is that there is only a small upside due to increased marketing investment.
Brand X’s best opportunity for growth lies in getting more out of its current investment
by spending more on more productive media and less on unproductive forms.
Moving marketing plans towards more ‘integrated’ and coordinated execution does show
substantial upside. Due to the synergies between TV, Radio and Digital Media, there are
significant opportunities to drive growth through more integrated execution of these
Bottom Line Analytics Global
Partner, Analytics (EMEA)
Bottom Line Analytics Global
M: +44 7970 789 663