Econometrics as a solution to blind spots in your marketing strategy: Grizzlink introduces econometric analysis.

You have the efficiency of your digital channels sorted thanks to ROI or ROAS, but can’t evaluate the impact of other channels offline? And how to analyse situations where the customers decide to buy your product based on your TV and through Google Ads only finishes the purchase? Based on the ROI in Google Analytics, the impactful channel is Google Ads and TV remains attributeless. Had it not been for it, though, the purchase would’ve never happened. How to approach this?

Grizzlink introduces a product among its analytical services which resolves all these pickles and helps brands make more informed strategic decisions: an econometric analysis.

Up until now, econometrics was mainly the domain of large corporations with deep pockets. Grizzlink strives to level the uneven playing field between David and Goliath and brings this tool not only to large media spenders but also to medium-sized companies whose strategic decisions have been clouded by intelligence blind spots. As with anything in marketing, the econometric analysis should be perceived as an investment, not an expense. Investment improves strategic decision making and strengthens your competitiveness in the long term.

Econometrics?

Econometrics is a field that explains economic relations through the use of economics, mathematics and statistics. It works with datasets worth of historical data, independent and dependent variables. The independent variables include media mix impressions (both you and your competitors), macroeconomic indicators, and other relevant factors; all on the weekly basis. The dependent variable is then business results – most frequently sales, but also a number of leads, store visits etc. To put it simply – the fundamental outcomes of an econometric analysis are the interpretation of the past, streamlining the present and predicting the future. Too ambitious? Read further.

1. Interpretation of the past

Thanks to the analysis of historical activities, we can evaluate which individual channel had the most impact on sales. Without thorough econometric analysis, it is virtually impossible to determine which channels are impactful and to what extent. At the same time, we can detect which channels are simply dead weight ready to be cut out off the media mix. The essential difference between an econometric analysis and an advanced attribution model is that the former does not examine a path to purchase of an individual customer, but works with the whole customer base.

What’s more, we don’t have to limit ourselves to media mix, but we can analyse other factors such as a creative, economic situation or cultural trends. This brings us to the next use of econometric analysis: making the present more effective.

2. More effective present

People best learn from their own mistakes, right? These don’t necessarily have to be mistakes. You could do all the planning by the book but thanks to econometrics you still find out that there is a slightly better split of media for your specific target segment. This way, econometric analysis can save up to 20% of your planned budget and redistribute it for improved effectiveness. Thanks to econometrics the next term will be planned based on real data specific to your segment and your brand. You don’t have to rely on assumptions or best practices for planning anymore.

3. Predicting the future

Thanks to econometrics, you can also predict your key performance indicators based on a specific media mix. Find out what the impact will be if you reallocate 10 % of your media spend to TV campaigns. What the consequences of halting your consumer contests will be. Simultaneously, you will be able to predict the impact of forces outside of your influence which still can have an impact on your business, such as macroeconomic indicators, cultural trends or the impact of weather.

It is noteworthy, however, that all these predictions must be based on historical activities. Although you can foretell the sales volume if you reallocate 10 % of your budget from one channel to another, you cannot predict the impact of adding a new channel, which you haven’t used before.

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