Econometric Analysis:
How much is enough (or too much) when it comes to marketing spend?

 This is a question that has often been asked over the years, and in many cases answered via trial, error and experience. Not that trials and tests aren't useful: rather, econometric analysis offers a more precise way of dealing with this question that minimises risk.

Econometric analysis (or market mix modelling) uses historical data to help predict future patterns. It is multi-variate and looks at interrelationships between variables of interest, for instance marketing spend, market forces and sales. So we get to understand how things like advertising (and below the line) work, and what works with them.

This approach can be helpful in pinpointing spend thresholds, beyond which investment provides diminishing returns. It can help optimise an existing marketing mix.

Return to questions