ROMI – the ABCs of measuring
The hype around ROMI has grown. The topic has been discussed on LinkedIn and written on the website of Markkinointi & Mainonta magazine, among others. Ilkka Keskiväli, Senior Data Scientist in the Advanced Analytics team, explains what ROMI means, how it is measured and how it is utilized in marketing, with six years of experience and more than a hundred ROMI modelling.
ROMI “Return on marketing investments” measures return on marketing investments
ROMI “Return on marketing investments” measures the return on marketing investments. ROMI indicates how much euros invested in marketing have generated sales, margins or turnover. It can be used to measure the effects of marketing measures, learn from the results and utilise the information in optimizing future measures. When measured regularly, continuous improvements in marketing efficiency are noticed.
How is ROMI measured?
ROMI can be measured in many different ways and on many levels. Econometric modeling provides recommendations for improving marketing effectiveness, mainly for planning at the strategic level. Of course, econometric modelling can also be utilised in tactical level planning, for example with the help of a scenario tool built on the basis of modelling.
What is attribution modeling
When you want to study the effectiveness of digital marketing in more detail, you should do attribution modeling. Dagmar has developed an attribution model based on the Markov chain, which takes into account not only customer paths that have ended in conversion, but also customer paths that have not ended in conversion. The results of attribution modelling are mainly used to enhance tactical and operational digital marketing.
Yllä mainitut mittaustavat vaativat ainakin jonkin verran manuaalista työtä, mutta markkinointia voidaan optimoida myös automatisoidusti. Dagmarin kehittämällä ohjelmallisen ostamisen optimointisovelluksella voidaan kasvattaa konversiomääriä ja pienentää konversiohintoja kymmenillä prosenteilla hyödyntämällä koneoppimista. Optimointisovellus toimii operatiivisella tasolla täysin ilman manuaalista työtä.
Measuring marketing for results
When measurement is carried out at all levels, amazing results are achieved. No model or method of measurement is perfect, so the most important thing is to start measuring somewhere, after which the results should be put into practice. After the changes made, we measure systematically – and learn more and more.
Measurement can be started, for example, with AB testing, which can provide results in a very agile manner. Measurement is developed at the same time as the first results are put into practice. In this way, the learning curve is constantly increasing.
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