Promotion Effectiveness

Optimizing and Measuring Promotion Campaigns

Depending upon the industry, promotional budgets are often larger than marketing budgets, yet they are one of the most difficult marketing investments to measure ROI, for many reasons. In a marketplace where consumers are practically trained not to buy something at full price, brands are constantly pumping out promotions to convert more consumers.

However, in order to understand the effectiveness of each promotion, brands need visibility in to how much the investment actually drove in incremental sales versus those sales that would have happened regardless of the investment.

The Challenge of Measuring Promotion Effectiveness

Promotions can be expensive. And while successful promotions can pay for themselves, unsuccessful campaigns can have adverse effects on both profitability and long-term brand equity.  To plan, execute and optimize successful promotional campaigns, marketers need insight into how timing, depth and length of discount, frequency of promotion, inventories and a variety of other items come into play, including the impact of marketing, operational and product investments.

Ipsos MMA’s approach to understanding and optimizing promotion effectiveness applies a rich and holistic set of commercial data which includes:

• Pricing depth and frequency
• In-store display and shelf
• Assortment
• Advertising
• In-store banners and other marketing
• Couponing
• Loyalty and shopper incentive programs
• Special packs
• Special in-store events
• Local marketing programming and events

But where some brands fall short in their promotional campaign process is taking into account factors outside of their control. Factors such as weather, seasonality, competition, sales force, operational and macro-economic drivers are difficult to predict and measure, but they heavily influence promotion effectiveness.

Solving Promotion Planning and Measurement Challenges

To help organizations optimize every promotional campaign and component, as well as discontinue use of ineffective ones, Ipsos MMA combines its marketing mix modeling analysis with the promotion effectiveness analysis, increasing a brand’s insight into the following areas:

• What combinations of promotions and marketing (traditional, digital, consumer) programs work best together?
• How do individual customer segments respond to the various promotional programs and activities?
• What is the short term versus long term impact of promotions on brand equity?
• How can I optimize my promotional mix within the context of sales and marketing plans?
• What is the optimal depth of discount and frequency for promoting specific products?
• What is the cannibalization effect of promotions on other brands?
• What are the true incremental sales and impact on profitability of my promotional strategy and tactics?
• What is the impact on forward-buying and/or cannibalization?
• What types of promotions are most effective for driving sales, share and/or profitability and to what levels?
• Which products and brands should I promote most frequently and where?
• How do specific markets react to promotion types and activities? What should the frequency of promotion be in specific markets?

Ipsos MMA provides a holistic combination of data management, quantitative analytics and high-value consulting to help organizations develop and implement more effective, efficient and productive promotional strategies and tactics.  Contact us to learn more.

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