Econometrics for media optimisation
With a hypothesis, methodology and model, media saturation curves can help determine the best channels to invest advertising in, as well as those performing less well, to boost sales.
Marketers are frequently looking to understand how to optimise their media mix and while there are various analytical techniques that can help them do this, it is generally accepted that econometrics is one of the most important elements in their toolkit. Like any analytical method, it will not be able to answer every question – and no marketer should ignore the wider objectives that advertising can deliver against – but it can be applied across many situations and helps to minimise misattribution by accounting for a wide variety of factors.
'Optimising the media mix' broadly means knowing how much to spend on media in totality and on each available medium in particular. But the term 'optimal' can be somewhat ambiguous and depends on what an advertiser is trying to achieve (i.e. sales growth, marketing budget efficiency or maximum consideration, for example). However, the steps towards achieving an optimal budget are similar, and at the very least means getting a better return for the money that is spent.