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Visa Consulting & Analytics

March 2022

 

2 - 3 Minutes

Measuring Marketing Effectiveness for Business Success

Marketing is one of the primary levers for driving business revenues, but it is also a significant cost. This requires you to be able to accurately and clearly show the tangible contribution that your marketing activity is delivering to your company’s performance to prove its value and justify continued financial investment.

Significant advancements in the field of analyzing marketing performance mean there are now a variety of tools available to help you confidently measure and understand the success of every marketing activity you undertake. To understand financial services marketing performance, a mix of measures, that are both agile and adaptable to the current market need to be used within an overall analysis framework. Our paper will allow you to understand why this is the case by exploring: 

• The current state of marketing measurement in financial services and payments

• The challenges around effective measurement

• Different methodologies to improve the quality of your analysis

"Successful marketing is crucial to the success of every financial services organization and with ever improving innovations in data science, marketers can assess campaign success better than ever before. With deeper insights, financial institutions can invest in marketing activities with confidence and focus on those bringing results and credibility to their services”, says Walter Lironi, Head of Visa Consulting & Analytics for Central and Eastern Europe, Middle East and Africa. 

So, what is the best way to measure your marketing effectiveness? The challenges in measuring marketing effectiveness mean that to produce results which truly reflect campaign performance you need to adopt scientific modifications to your data and measurement methodology to achieve greater accuracy. In our paper we present two scientific modifications that allow you to provide a true historical comparison and bring realistic campaign outcomes much closer, making it easier for you to decide where to invest your valuable marketing resources.

Methodology 1 

Improve the reliability of marketing measurement by enhancing the quality of the customer control set against which success is measured. A two-step process allows you to stress-test any assumptions and alter the control set to mimic customer behavior:

Step 1: Create the control set using a K Nearest Neighbor (KNN) cluster method.

Step 2: Re-weight every customer specific observation in the control set created using a technique called Entropy Balancing.

Methodology 2 

Eliminate the external effects of trends and seasonality effects so that you can accurately compare time periods. Utilizing Holt-Winter’s forecasting you can eliminate the effects of external factors, leaving a pure and accurate forecast to measure the impact of your campaign.

Applying our methodologies will enable you to highlight the true contribution from each marketing campaign you run so you can clearly see where activity should be upweighted and where campaigns are not delivering, allowing your marketing budget to be redeployed to optimal effect.

For more insights please read our full opinion paper here. To find out how we can help you address any of the ideas discussed, please get in touch with our Visa Consulting and Analytics team. 

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All brand names, logos and/or trademarks are the property of their respective owners, are used for identification purposes only, and do not necessarily imply product endorsement or affiliation with Visa.

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