Download The Media Machine: Optimizing Intermedia Efficiency

The Media Machine: Optimizing Intermedia Efficiency through Continuous
Algorithmic Evaluation
Prof. Petri Parvinen
Media Machine is an outgrowth of a major research
effort on the sales-and-marketing-yield (SAMY)
effects of inter-media advertising (Graphic Industry
Association Finland, 2015). Shortly put, the SAMY
research initative utilized data from three major
retailers in Finland (home electronics, fast casual
food and furniture) to examine the return on
marketing investment by the companies. The dataset
contained advertising media expenditure data from a
multitude of channels and the attempt was to measure
their relative effectiveness to detailed sales data as
the dependent variable.
better per euro when it was done with a large
budget.
The results of the SAMY research can be
summarized as follows:
The research observed the different roles of print
and digital advertising, with the effect of print
attributing to evoking emotional cues, activating
willingness-to-purchase and drawing attention to
new products whereas digital marketing excelled
at product comparisons, attaching the buyer to
the user community and providing price &
provider information.
The incremental marginal profit returns (here:
sales-and-marketing-yield SAMY) that
companies would get from increasing media
expenditure are highly positive. By analyzing the
marginal contribution of an increased media euro
with the assumption of other costs being fixed
was positive in 15 of the 16 media channels
investigated in the study.
The inability of the researched companies, which
are well known for their advanced marketing and
relatively high media budgets, to increase their
media expenditure further can be attributed to
1.
the lack of continuous follow-up knowledge
regarding the channel-specific and relative
inter-media efficiency of their marketing,
and
2.
the habit of thinking that marketing
efficiency is at its best when the marginal
contribution of a marketing euro is at its
highest, not when every media with SAMY
> 1 is spent. In other words, the companies
are evaluating media efficiency by thinking
that all marketing costs are variable when
the media expenditure is decided upon,
which it is not.
The research witnessed how SAMY in coupon
marketing was increased significantly when the
volume of media expenditure was increased
significantly – i.e. the marketing started working
The research witnessed how SAMY in print
marketing was increased significantly when the
volume of media expenditure was shifted from
newspaper advertising to newspaper-annexed
print attachments.
The research demonstrated how a high-end
furniture catalogue can be finetuned to produce
high SAMY
The ad stock and half-life effect (durability of
exercised marketing) was observed to be very
important from the perspective of maintained
SAMY effect.
The SAMY research initiative has led to the
development of “Media Machine”: a simple but
widely applicable tool for continuously improving
unbiased intermedia efficiency. The Media Machine
extends algorithmic logic of banner advertising
optimization to monitor and optimize marketing in
the same way in all channels, digital or traditional,
based on continuous learning. It suggests
improvements for the media mix i.e. the amount of
each media at any point in time or for budgeting
decisions. Knowledgeable users at marketer
companies, media agencies and media houses can
also use Media Machine to experiment automatically
and evaluate marketing substance such as creative
content. In the future, the Media Machine will relate
sales and marketing efforts to each other and
optimize their relationship, as well as link sales and
marketing efforts to each other into efficient
combinations
More information: Prof. Petri Parvinen,
[email protected] +358 50 312 0905