Time: The neglected variable in Marketing Return On Investment questions
What’s the Return On Investment on Marketing?
Depends on how soon you want your return. Time is frequently a neglected variable.
Recall that marketing had a schism right around 1920:
- One man went on to found the branding agency, and found salvation through broadcast radio, and later, TV.
- One man founded the first direct advertising agency, and continued to find salvation through direct response and cataloging.
- The schism only really came to a head when digital forced it to come to a head.
Implications:
- Evidence for a direct causal inference between marketing treatment and marketing conversion is greatest at the point of sale / point of conversion.
- Any evidence of causality is severely diluted at the branding / awareness level at the earliest portions of the customer funnel / fish / cycle.
- It follows that direct mail people overestimate their impact, and underestimate the impact of branding.
Remember that:
- There is a lag between initial treatment, customer acquisition, and return.
- The longer the lag, the more opportunities for noise and collinearity to creep into your models.
- Skepticism expands as the time lag expands.
Marketing is a system. Time is a factor in that system. The biggest conflict in brand modelling is how long is that time horizon.
That doesn’t mean that anybody is wrong.
Just be aware that it’s a factor you need to be aware of. And that it’s a good factor.
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I’m Christopher Berry.
I tweet about analytics @cjpberry
I write at christopherberry.ca