One of my favorite quotes in advertising came from John Wanamaker: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” This quote is great because it was based in fact and held true for nearly a century. However, data collection in advertising has changed significantly in the past 20 years. Marketers now have access to more metrics and analytics than Mr. Wanamaker could have been imagined when he opened his first store in New York in 1896.
We have entered a period in which we can not only understand how advertising is driving sales, but we can attribute revenue to the individual ads, keywords, emails, whitepapers, events, television advertisements, social media posts, etc…the list goes on and on. Now we are ready to put the data we have been collecting to work for our organizations. In addition, we can also proactively identify interested buyers based on their digital body language.
These advancements have led to technology platforms making significant investments in predictive analysis and automated forecasting. The recent acquisition of RelateIQ by Salesforce illustrates the emerging market of predictive technology.
The following are four ways in which predictive technology can make your life easier.
- Planning: We all need contingency plans and have to understand best/worst case scenarios. Before the days of being able to tie marketing initiatives to revenue with confidence, planning was very difficult and often left marketing teams without a seat at the revenue table due to low confidence in revenue driving capabilities. However, with the data available today marketers can be counted on to deliver on-target revenue predictions based on budget changes, external/internal factors, and historical performance. These scenarios can be loaded into algorithmic models that allow a marketer to create plans based on business needs and demands.
- Forecasting: Through informed situational planning and platforms that can ingest your marketing and sales data, you can now accurately forecast your revenue down to the campaign, ad, and placement. This allows you to spend less time on manual analysis and takes much of the guess-work out of building your budget and forecast scenarios. In addition, you can also use behavioral indicators of consumers to predict future demand.
- Budgeting: Once you have laid the framework of your plan and forecasted results, it is much easier to lock in a budget that aligns with your organizations goals and limitations. With the ability to accurately predict the point of diminishing returns, you can allocate your budget to the optimal channels cutting waste and giving you the best return for your money. In addition, you are also able to control pacing through prediction of peaks in valleys within the demand for your product or service.
- Optimization: Even the best laid plans can be tweaked as learnings are gained and behavioral changes are observed. This is a critical part of the marketing and advertising process. With the ability to take into account a changing landscape and predict demand fluctuations, you can proactively re-allocate funds between campaigns in order to provide optimal performance across your marketing activity.
These four techniques are already a part of most marketing organizations’ processes, but much of it is being done manually based only on historical data, loose predictions, and lots of human intuition. I like to refer to this process as the art and science of marketing. While there is still plenty of room for the art in marketing, the science portion is quickly becoming the focal point of our roles as new predictive technologies emerge to help us automate and scale. For me this is a welcomed change that gives exponential value to what we can provide as marketers. This also turns advertising from something that is looked at as “50 percent waste” to something that becomes an integral part of our organization. With that, I would like to leave you with an advertising quote from Henry Ford – “Stopping advertising to save money is like stopping your watch to save time.”
Image via Shutterstock.
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