Season 3, Episode 4: Econometric advertising measurement (with Grace Kite)
Mar 6, 2024
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Topics covered in this podcast include: the use of econometrics in marketing, navigating the shift to probabilistic advertising measurement, exploring new advertising avenues beyond traditional tracking methods, effective advertising strategies and the rise of CTV, analyzing the evolution of advertising strategies, evolution of marketing mix modeling with MMME technology, and practical marketing strategies and training courses for growth.
The shift from deterministic to econometric measurement in marketing requires coordination between marketing and product teams to align strategies for evaluating marketing initiatives.
Studying economics, statistics, or mathematics is crucial for marketing economists to effectively apply econometric models and navigate complex marketing challenges.
Econometric models prioritize simplicity and clarity for effective communication and decision-making, emphasizing data-driven actions based on stable relationships.
Deep dives
Transitioning from Deterministic to Probabilistic Measurement in Marketing
Moving from deterministic to econometric measurement frameworks in marketing requires a shift towards understanding the broader spectrum of factors influencing sales. This transition emphasizes the importance of coordination between marketing and product teams to align pricing, promotions, and audience development strategies. By focusing on stable relationships and updating models strategically, marketers can efficiently evaluate the impact of various marketing initiatives.
The Role of Economics and Statistics in Marketing
To excel in a career as a marketing economist, studying economics, statistics, or mathematics is essential. Understanding the theories of marketing, consumer behavior, and demand curves is crucial for applying econometric models effectively. A strong grasp of economic principles combined with practical data analysis skills allows marketing economists to navigate complex marketing challenges.
Balancing Complexity and Simplification in Econometric Models
Simplicity and clarity are prioritized in econometric models to ensure effective communication and understanding among stakeholders. The emphasis lies on making data-driven decisions based on stable relationships rather than reacting to short-term fluctuations. Integrating human reasoning with quantitative analysis enables marketers to derive actionable insights from the data.
Optimizing Marketing Strategies for Growth
Optimally allocating scarce resources, such as marketing budgets, is a fundamental aspect of successfully driving growth in businesses. The immediate impact and visibility of performance marketing make it a fulfilling career choice for those seeking tangible outcomes from their analytical efforts. By strategically optimizing marketing strategies, marketers play a pivotal role in driving business success.
Educational Pathways and Practical Applications in Marketing Economics
High school students aspiring to pursue a career in marketing economics should focus on studying economics, statistics, or mathematics to gain a foundational understanding of the discipline. Practical application of economic theories in a marketing context, along with real-world experience in data analysis and strategic decision-making, can prepare individuals for successful careers in marketing economics.
In this episode of the Mobile Dev Memo podcast, I speak with Dr. Grace Kite, the Founder and CEO of two companies: magic numbers, a consulting and advisory firm that helps companies apply econometric models to their marketing measurement, and magic works, a company that specializes in training related to the application of econometrics to marketing measurement.
In our conversation, we cover:
The use case of econometrics as a discipline in marketing;
The ways that econometrics is utilized by marketing teams to make decisions;
How marketers can navigate the “unknown unknown” problem of shifting from deterministic measurement to probabilistic and/or econometric measurement;
The added benefit of the more immediate and granular availability of data provided to econometric measurement for digital-first advertisers;
The specific econometric methods and frameworks that are utilized by marketing economists;
How the measurement cadence changes when a marketing team transitions from deterministic to econometric measurement;
What resources exist for a marketer looking to expand their domain knowledge as a marketing economist?
Thanks to the sponsor of this week’s episode of the Mobile Dev Memo podcast: