Media Doesn’t Deserve THAT Much Credit

If you’ve leveraged an attribution tool for your paid media, it often credits all sales to all paid media. Other team members – like your PR team or branding team – would like a word.

A virtuous attribute of media mix modeling is that some sales credit – in fact a lot – is attributable to “history.” History is the compilation of all the marketing stimulus you’ve exercised in the past. “History” contributes to this measurement period’s sales.

If you sell cars, for example, media mix modeling likely shows that 80% of your 2024 sales are attributed to marketing activities prior to 2024.  History can also be attributed to word of mouth – e.g. John Smith car sale in 2023 was a big hit with his neighbor. The neighbor then noticed your brand on TV and bought from you in 2024.

What happens if you discontinued advertising in 2024? Your sales would likely decline 30ish% that year. Maybe you would decide that the cost of 2024 media supersedes the cost of the lost sales. You could be right. But then, the following year, sales would decline 60ish%. From there you’re on a death spiral.

The trick is to calculate the return on investment of the 20% incremental sales. Then calibrate the media investments to optimize ROI. From there, go forth with the knowledge that your media investments today are planting future gardens of opportunity.

The pie chart below illustrates that in the given period measured, “history” attributed more than 80% of sales. Nevertheless, the 20% of sales attributed to paid media generated a positive ROI.