Automakers to Optimize Media Mix for Improved ROI

Marketers are working harder than ever these days to reach consumers with their promotional messages. But consumers have found more channels to engage with — like social networks and mobile phones. As ad budgets continue to be squeezed, smart marketers are taking a closer look at their media mix and optimizing their spending to lower costs and improve results.

The media mix optimization study published by Axciom notes that marketers can improve their promotional outcomes by employing best practices. The Axciom method includes key components: Discovery, data gathering, statistical modeling, optimal spending allocation, implementation, and testing and tracking. To prove the point, Axciom analysts shared their strategy as it applies to a new vehicle launch.

It’s no secret that auto manufacturers must coordinate marketing with multiple partners such as dealers and dealer groups. In addition, auto manufacturers must now target multiple consumers groups which are influenced by an ever expanding number of marketing channels. Finally, advertising costs per vehicle have remained essentially unchanged in the past 3 years – a little over $1,000.

Given these challenges, automakers are hoping that 30% of revenue next year will come  from newly launched or redesigned vehicles.  Axciom analysts focused on the buying audience for the luxury car market: Typically older, middle-​upper income and home-​owning consumers. In studying the media mix and consumer behavior, manufacturers should know that even older consumers may first use the Internet as a trigger to do additional research. As a result, one strategy for automakers may be to reduce funding for traditional channels such as direct mail and TV and increasing funding for search or online display.

After a launch is underway, automakers that employ a good data analytics model can adjust spending in a narrowcasting mode rather than the traditional broadcasting mode to maximize the return on the ad spending.

Marketers may choose to use an optimization model offered by a vendor like Axicom or develop their own strategies, but a thoughtful, deliberate approach to media mix adjustment and narrowcasting may grow more popular as advertising moves into a data-​driven era.

[Sources: Along the Journey of Media Mix Optimization. Axciom​.com 2011. Web. 6 Apr. 2011; Driving More Launch Sales. Automotive Consumer Dynamics. Axciom​.com. Web. 6 Apr. 2011]


Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.