2. What is econometrics
• How it works
• Data that is needed for analysis
SOM Model
• Factor Analysis
• ROI Evaluation
Comparison with main competitors
• Factor & ROI
Forecast possibility
2
Agenda
4. Around a
summer
campaign
sales are
20% up
YOY. Why?
Large discounts
available?
Competitors
spending less?
We moved TV
spend to Door
Drops?
The weather
was good?
4
How would you answer to this problem?
Econometrics
5. Is an attempt to understand how our dependent
variable:
• Sales value
• Market Share
• Shops traffic
• Brand awareness
is changed due to variation of other parameters:
• Distribution
• Price
• Adv spends etc.
5
Econometric model
7. 7
Econometrics in media helps to answer a lot of
questions
What the relationship is between sales, seasonality, price,
distribution and Advertising
How much Advertising influences sales value
How long advertising effect lasts
What results should we expect from increase/decrease of
Advertising budgets
What periods will give the highest Advertising ROI:
•How to distribute Adv activity in time
•What media mix to choose
8. Sales and Market by SKU
for the whole category
Sales data
– Absolutes or SOM
Price
– Price index as deviation from
average Category price
Distribution
*Data should by at least on monthly basis for
3-4 years. Geographical split is appreciated
8
Data that is needed for analysis
Market Activations
Sales Promo
National Consumer Promo
Launches of Competitor’s
SKU
Media Activations
TV by type (image/promo)
and by copy
TV Sponsorship by channel
Internet by type
OOH by type (traditional,
metro, interactive)
16. 16
Media and Promo factors output change over time
Change of average
Media & Promo factors
output from year to
year
Detailed Media &
Promo factors output
with analysis of reasons
Comparison of Media
budget split with Media
output split Average
ROI evaluation
19. 22
Evaluation of Price change influence on SOM
Aug’14 Price Index=0,96
We can evaluate what Price should be
to achieve goal SOM under certain
Distribution value
20. 23
Evaluation of Distribution change influence on SOM
Aug’14 Distribution=76,8
We can evaluate what Distribution
should be to achieve goal SOM
under certain Price index
23. 26
Output in terms of SOM for media Investments
BybudgetorTRP’s
ROI curves for
each media
channel by type
based on modeling
Detailed analysis
of ROI including
saturation level for
each channel
Regional analysis
for local media
channels (e.g.
OOH)
TV analysis by
creatives
25. Higher ROI
Tactic
Higher ROI
Strategic
Lower ROI
Strategic
Lower ROI
Tactic
32
ROI Map for comparison of media channels
WithoutPriceandDistributionInfluence
Sponsorship M1
TV Promo
SMM
TV
Sponsorship MTV
Pre-rolls
Interactive OOH
OOH
Context
Banners
IdeaX TV
Metro OOH
Promo (Bonus&Discount)
Promo (Sale out)
Promo (Buy&Get)
ROI
Changeofefficiency
withtime
ROI and duration of influence
26. ROI and duration of influence
Higher ROI
Tactic
Higher ROI
Strategic
Lower ROI
Strategic
Lower ROI
Tactic
33
ROI Map for comparison of media channels
WithoutPriceandDistributionInfluence
ROI
Changeofefficiency
withtime
27. ROI and duration of influence
Higher ROI
Tactic
Higher ROI
Strategic
Lower ROI
Strategic
Lower ROI
Tactic
34
ROI Map for comparison of media channels
WithoutPriceandDistributionInfluence
Sponsorship 2
TV Product
TV Image
Sponsorship 1
Pre-rolls
Interactive OOH
OOH
Context
Banners
Metro OOH
Promo (Bonus&Discount)
Promo (Sale out)
Promo (Buy&Get)
ROI
Changeofefficiency
withtime
29. 36
For the comparison models of competitors’ sales
are created
ROI curves
comparison for each
media channel by
type
Local results analysis
where needed
Detailed Media &
Promo factors output
comparison with
analysis of reasons
31. Brand plans
Price policy for the next period
– Your assumptions of category
price policy forecast is
appreciated
Distribution changes plan
*Data should by at least on monthly basis
41
Data that is needed for forecasting is your plans
Market Activations plan
Sales Promo
National Consumer Promo
Launches
Media Activations plan
With detailed split by
media channels with
weekly media pressure
plan
TV weekly plan by creative
with specification
32. 42
Forecast should be updated each quarter
Sales forecast based on
market and media
activation plans
Should be updated according to actual
price and distribution changes
Detailed analysis of
factors output and
media
recommendations
Forecast of
competitive
environment
33. Media activations (including price seasonality factor)
Most effective media mix based on
• Price factor
• Efficiency of channel
• Saturation point of channel
• Communication task (strategic or tactic)
Appropriate level of distribution for
• Media launch of new SKU
• Rich of specific SOM (under other stable conditions)
Appropriate price policy for Rich of specific SOM (under other stable conditions)
45
Econometricmodelmayhelpinplanning
