Going through the bins

I'm currently reading a brilliant book called "The Black Swan" by Nassim Taleb where he exposes just how poor humans can be at forecasting. Taleb was a quant on Wall Street so he should be well aware of the power or otherwise of forecasting.

One interesting observation I took from the book was just how poorly we forecast because we limit the set of information we consider before drawing conclusions. So how do the guys in the city make their money?

One explanation came my way the other day. The "top" guys look for the big unexpected (by others) events. How do they do this? Well according to my source, one method is to hire private detectives to go through the rubbish of directors from the firms and industries that they track. Why bother trying to forecast share prices with dubious assumptions on productivity gains etc when you can just go through the rubbish and find out whether the company has a massive law suit creeping up on them. Genius forecasting if you ask me!

Is "on demand" a new concept?

There is nothing new in media.

What is a Brand Painting?

One of the key lessons that any analyst needs to learn is the ability to turn numbers into insight which can be “read” by almost any client. While analysts deal in numbers all day long, many of the audience for their research see numbers as an impediment to their understanding of a subject. Therefore every analyst needs a good set of charts, visualisations and other associated images to help them tell the story of their analysis to a wider audience.

For Marketing Mix Analysis (an analytical technique which seeks to estimate the incremental impact of each core marketing activity on total sales performance), one such key chart is the “Brand Painting”. A Brand Painting is a visual decomposition of the sales performance over time showing how much each driver is contributing at each point in time.

Here’s an example of a brand painting taken directly from our modelQED™ application:

In this picture, we can see a “base” level of activity which contains a range of inputs including seasonality, longer term market trends, special events and in the case of output from modelQED™, the impact of competitor marketing*.

We can then see the incremental impacts of TV, Press, Radio and Outdoor advertising as well as some short term promotions plus the detrimental impact of price rises on total sales.

What makes this a useful graphic? Well I think the following:

• The Brand Painting gives you a great view of sales performance across time – something often ignored
• Brand Paintings are a great way of assessing the overall impacts of drivers – whilst the ROI on an online campaign may look fantastic, has it actually moved the needle? Being able to see the relative sales increase from each channel is important
• Trends can become more obvious – the impact of all those small price rises can soon add up to a lot of units for an elastic brand but an elasticity value of -3.2 often fails to convey the magnitude of this change
• They can give a great insight into the medium term impact of marketing – the period over which the short term impact decays

Any pitfalls?

• Brand Paintings don’t show the ROI of investments – a large impact may or may not have a large investment behind it
• You can’t easily get any sense of whether there are diminishing returns present in the drivers
• You can only plot Brand Paintings if a model uses an additive mathematical structure – or at least if only makes sense to in these circumstances

So the upshot is this: I love Brand Paintings and almost every client I’ve ever worked for instinctively found them valuable when I presented my analytical results. If you don’t have the right applications then they can take a little bit of effort to construct in Excel or SAS but ultimately they’re worth it.

*note that modelQED™ does estimate the impact of competitor marketing but it is not charted on Brand Paintings by default.

The 30 second spot is alive and well

Interesting little presentation on the "death" of the 30 second spot. It appears that it's another top media myth. Having said that, I've never had access to the IPA databank and I'm also sceptical that the databank is all that useful since it contains only campaigns percieved to be success stories. Nonetheless it's an interesting starting place and I completly agree with the conclusion that TV advertising is still the best medium if you need.

Whatever anyone says big campaigns need TV for reach and impact - nothing else can match it!

View Upload your own

Nod to Scamp for the link (http://scampblog.blogspot.com/2008/02/heresy-of-month.html)

the true value of research...

As posted by Seth Godin via Gabe

Honda vs. Ford via Scamp

Nod to Scamp - (see http://scampblog.blogspot.com/2008/02/battle-of-epic-car-ads.html)

This post vividly shows the difference between a great commercial and a reasonable one. My guess is that Ford are a little too "safe" when defining a brief whereas Honda have built and been true to a brand philiosophy.

Wieden & Kennedy must be the best around at the moment!