Using Statistics To Optimize Your Advertising ROI

Through multivariate statistical analysis, THE MARKETING ANALYSTS can take several advertising concepts and determine the most effective design that will maximize your advertising ROI.  Regardless of the hundreds of combinations of variables (different prices, offers, imagery, text, size, placement, color, etc.) that your copy tests involve, we can quickly reduce our testing to a dozen simple experiments that run simultaneously.  Instead of considering one variable at a time, our methodology tests all variables at once, this is why the number of tests can be so small. With our proven approach, we identify the best method to maximize your advertising campaign’s results.

To learn more about our advertising tests, visit our advertising concept and copy test page today or contact us for additional information.

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Perceptual Maps With Correspondence Analysis

In a recent blog entry, we wrote about a compositional approach to perceptual mapping known as discriminant analysis.  Correspondence Analysis is another method used to create a perceptual map that involves a set of objects and attributes (ex. distinctive product or service attributes by demographic group) from a contingency table that are plotted on a shared perceptual map.

Cross Tabulation By Brand & Age

Age Category

Brand A

Brand B

Brand C

Brand D

Total

Young Adults (18-34) 30 30 30 30 120
Middle Age (34-50) 50 20 20 10 100
Mature (51-67) 20 40 10 40 110
Senior (68+) 40 10 50 40 140
Total 140 100 110 120 370

Looking at the table above, we see that brand sales vary among brands and age groups.  However, identifying meaningful patterns requires standardizing the data so that meaningful comparisons can be made.

In the young adults category, the table shows that an equal amount (30 units) of each brand was purchased.  But is this what we would expect on average?  How could determine if this group actually prefers one brand over another?  In order to determine if this age group prefers one brand over another, we must compute the expected value of sales in proportion to overall product sales across all groups.

Age Category

Brand A

Brand B

Brand C

Brand D

Total

Young Adults (18-34)

35.74

25.53

28.09

30.64

120

Middle Age (34-50)

29.79

21.28

23.40

25.53

100

Mature (51-67)

32.77

23.40

25.74

28.09

110

Senior (68+)

41.70

29.79

32.77

35.74

140

Total

0.30

0.21

0.23

0.26

470

Once the above expected values are calculated, the differences across all age groups and brands must be standardized using the chi square statistic and then these associations must be converted into a perceptual map.  Once the model fit and dimensionality has been established, the researcher is faced with two tasks: interpreting the dimensions and assessing the degree of association.

The following perceptual map was created using correspondence analysis.

Perceptual Map Created With Correspondence Analysis

Perceptual Map Created With Correspondence Analysis

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Each of our certified Arabic language translators has more than 10 years of experience in providing the highest quality translation service.  We guarantee your complete satisfaction because leading professionals will translate your documents with extreme care, accuracy and detail.  Since our translations are guaranteed to be 100% accurate, if you see a problem with it, we will immediately fix it free of charge!  Further, our guarantee is valid for the life of the translated document.

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Select A Certified Translator From THE MARKETING ANALYSTS

Get A Certified Translator From The Marketing Analysts

Get A Certified Translator From The Marketing Analysts

THE MARKETING ANALYSTS is an established leader in interpretation and translation services that employs certified translation professionals.  Because we are a licensed, registered veteran owned company, you are assured the highest quality service.  In fact, we guarantee your complete satisfaction or you get your money back.

Because we conduct our business and customer communications over the internet, and we can serve you no matter where you are, and you do not even have to leave your home/office in order to receive the translation or consultation necessary.

Further, we offer quick turnaround service.  Often, we can arrange complete translations in less than 24 hours.

With our team of certified translation specialists, we specialize in providing translations to and from nearly every spoken language.  Our team includes certified Arabic translators, certified English translators, certified French translators, certified German translators, certified Hindi translators, certified Japanese translators, certified Portuguese translators, certified Russian translators, certified Spanish translators and more.

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Discriminant Analysis, Marketing Segmentation & Perceptual Maps

Perceptual Map Created With Discriminate Analysis

Perceptual Map Created With Discriminate Analysis

Perceptual maps are used to visualize the differences and similarities in perceptions and choices between products, brands or customers.

For example, a manufacturer of salon brand hair care items wants to see whether a lifestyle variables such as being a NASCAR racing fan, education level, ethnicity and demographic variables such as personal income, sex and a number of other factors are useful in distinguishing purchasers of their products from purchasers of other salon hair care brands.   Based on this classification, customer profiles will be developed in order to plan targeted advertising campaigns.

Discriminate analysis, a multivariate technique used for market segmentation and predicting group membership is often used for this type of problem because of its ability to classify individuals or experimental units into two or more uniquely defined populations.  The discriminant score is the basis for predicting to which group (a purchaser of the manufacturer’s brand or a competitive brand) the particular individual belongs. The discriminant weights of each predictive variable (age, sex, income, etc) indicate the relative importance of each variable.  For instance, if age has a low discriminant weight then it is less important than the other variables.

With this information, a classification matrix can be developed that indicates the accuracy of our model that will be used to construct our map.  For instance, if our discriminant model correctly classified 94.5-percent of users of our brand, then only 5.5-percent were incorrectly classified.  Conversely, if the model correctly classifies 92-percent of the competitive brand users, then only 8-percent were incorrectly classified.  We consider this a strong model because the number of correct classifications is much higher than what might be expected by chance.

Other Applications of Discrimant Analysis

While our example illustrated how discriminant analysis helped classify users and nonusers of salon brand hair care products based on independent variables, other uses of discriminant analysis include the following:

Product research – Distinguish between heavy, medium, and light users of a product in terms of their consumption habits and lifestyles

Perception/Image research – Distinguish between customers who exhibit favorable perceptions of a store or company and those who do not

Advertising research – Identify how market segments differ in media consumption habits

Direct marketing – Identify the characteristics of consumers who will respond to a direct marketing campaign and those who will not

Conclusion

While discriminant analysis is often used in marketing research for marketing segmentation and predicting group membership, there are more powerful and accurate techniques available.  We invite you to learn more about our solutions by contacting us today.

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239-243-0767
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Copytesting Procedures That Maximize Advertising ROI

Advertising Copytesting

Advertising Copytesting

Although copytesting is widely used throughout the world, most of it is low quality and unreliable.  Often, it is unclear as to what is actually being evaluated.  Only rarely do copytesting studies provide any insights into actual performance.

To ensure the success of your advertising campaign, THE MARKETING ANALYSTS believes advertising research must comply with the following principles.

  1. Copytesting should provide measurements that are relevant to the specific objectives of the advertising campaign.  For example, if the objective of an advertising campaign is to evoke emotional appeal, a measure of day-after recall would be appropriate.
  2. Copytesting research should provide actionable insights and recommendations that project the campaign’s success or failure.  If the research suggests that the campaign will not achieve performance objectives, the campaign maybe be cancelled or media distribution maybe scaled back.
  3. Copytesting should rely on multiple performance measurements.
  4. Copytesting should be based on measurements of human response.  This includes the reception of a stimulus, the comprehension of the stimulus and a measureable response to a stimulus.
  5. Copytesting research should suggest the number of exposures required to produce a stimulus.
  6. Copytesting should attempt to duplicate an actual environment (clutter, competitive offerings, etc) where the ad is scheduled to be placed, received, processed and responded too.
  7. Copytesting should take into account basic sampling considerations.
  8. Copytesting should be based on reliable and valid research methodology.

While these principles establish a high set of standards, they should be regarded as necessary.