Measuring Marketing's Worth: Top-Down, Bottom-Up Tools Both Needed

Measuring Marketing's Worth Top-Down, Bottom-Up Tools Both NeededHere it comes: the future everyone predicted. Yes, digital ad spending — for the first time in U.S. history — has trumped money spent for advertising on broadcast TV.

A study released by the Interactive Advertising Bureau (IAB) in April released figures showing that $42.8 billion was spent on online advertising in 2013 – that’s a 17 percent increase from the previous year. And it compared to a total of $40.1 billion spent on broadcast television.

The shift to digitization has already altered the media planning and buying process. In the “old days,” brands and agencies would plan and commit to advertising up to a year in advance.

Today’s online, digital advertising world has turned that upside down. Just about everything in digital is trackable down to a minute level, and marketers have access to a constantly increasing volume of user stats and media data. That means marketers have not only the ability to optimize media buying — but a mandate to move faster, faster, faster.

However, marketers can’t simply dump their traditional offline channels and move all media spending to the Web. The need now is to understand the consolidated influence of online and offline channels on overall success. To do so, marketers must be able to track and analyze offline and online performance in an integrated system.

Advancements in measurement technologies now enable marketers to track and examine offline and online performance together at a faster pace.

Techniques like top-down modeling utilize “summary-level” data to analyze and predict performance for channels like broadcast TV and also print media — that’s where user-level data isn’t available. Top-down modeling offers the same cross-channel analysis as traditional MMM, with the added benefit of incorporating an organization’s “tribal knowledge,” such as new product launches, good or bad public relations, the marketing buys of market competitors, and more. The successful marketer combines this with bottom-up modeling techniques, which leverage granular, timestamp-based “cookie data” to provide unique customer insight into the performance of each channel and marketing tactic.

Digital is here, but the old standards aren’t dead. If marketers utilize both top-down and bottom-up analysis strategies, they will be able to identify just what approaches and synergies between online and offline channels affect performance and — ultimately — the bottom line.