Measuring advertising effectiveness to inform media spend

The challenge

An American company was the first insurer to sell car insurance direct to Japanese consumers, instead of via brokers. Over the course of 18 months, the company used multiple media channels for sales promotion to grow their car insurance sales. The company wanted to understand the real contribution each media was making to sales, to inform their future media spend.

The solution

Datamine set out to identify the influence that television and newspaper spend had on sales attributable to other channels. Due to the direct nature of the product, most sales could be attributed to a particular media. Cost per response (CPR) was calculated based on media spend via each channel.

Datamine built a model to link weekly sales to the weekly spend in each of the five media channels; television, newspaper, magazine, satellite television and direct mail. The model was built to factor in weekly media mix and spend, competitor activity and other ‘environmental’ variables.

The result

The model found a proven link between television spend and other sales; for every two television sales, the company got a sale ‘free’ from another source. This reduced the cost per response of television advertising considerably.

A proven link was also found between television spend and direct mail sales; direct mail campaigns had more impact and higher response rates when there was a television campaign running at the same time. It was found that every 3.5 television sales generated an additional direct mail sale.   

Assessments of the effectiveness of the company’s advertising enabled them to clearly see what effect their chosen channels had on sales and allocate their advertising resources, going forward, to align with the most effective channels. This analysis also helped the company justify their television spend, the most expensive channel because the return on investment made their television campaigns viable.