Are Data Challenges Killing ROI Models?

Summary

Marketers have hit a wall in their ability to accurately measure ROI across their media mix—due in large part to limited access to consumer data by walled gardens such as Google, Facebook, and Amazon, and to privacy constraints. Author Gian Fulgoni suggests two paths analysts can pursue to address this. Marketing-mix-models are designed to measure the impact on brand sales of each of the key elements of a brand’s marketing mix. Through statistical analyses, the modeling uses sales and marketing time-series data to estimate the impact of various marketing tactics on sales. Marketers have relied on these models to determine their marketing budgets since the 1980s, when supermarket retailers first began using point-of-sales UPC scanners, which provided the granular sales data they needed to run the models. “How can researchers build actionable marketing-mix models for accurately measuring marketing ROI without sufficient data at the individual consumer level?,” Fulgoni asked.