When predicting a new campaign, you can choose to input either a set media investment (media budget) to get a prediction on how much effect (usually sales) can be generated, or you can input an actual media sales target, to predict what investment level is needed to achieve that. 


For the target-based optimization, it's important to keep in mind, that this is the target for the media-generated sales, and not for the total company sales. For any given period, different drivers will contribute positively (and sometimes negatively) to your total sales.


Your media investment will only generate a part of the total sales, just as other drivers, such as weather, macroeconomics, market events, distribution, product pricing, competitor activities etc. will also contribute to your total company sales. 


This breakdown can be analyzed by our modelling framework and is available on the Business Insights page. Here you can see how much various drivers contribute positively and negatively to your total sales, for any given period selected.


The specific share that media drives the total sale, can be seen under the "Media Generated Sales" figure, on the Media Insights page:



With this in mind, it is obvious, that your company cannot expect your marketing efforts and investments, to be solely responsible for generating your total company sales. Only a share of the total company sales will be generated by your media investments. 


Also, the share of sales (or contribution to sales) coming from your media investments, is not constant. When you don't invest in any media exposure, there will naturally not be any contribution to company sales from the media. Conversely, investing heavily in media will result in a very high media contribution to total company sales.


Generally, the contribution to total sales coming from media investments, on average varies between 2-50% depending on industry and market conditions.


So now, for setting the media sales target for your prediction. There are 2 ways to go about this:


  1. If you already work with specific media sales targets (as a share of total company sales targets), just input those in the target input when initiating your prediction.
  2. If your company operates with total sales targets, you need to figure out, what the estimated media share of this will be, and input that in the target input when initiating your prediction (see below)


When figuring out how to set your media sales target from a total company sales target, you have to take two factors into account. 

  1. Within what period are we expected to deliver our part to total sales?
  2. What is my average media contribution to total sales (in similar periods)?


To identify the most accurate media sales target, you have to figure out what your average media contribution is, for a total company sales target of 10.000, for a similar past campaign period (you can investigate this, in the "Overview" area). The media-generated sales in that period, will be a fair media target to input in the target input when generating your prediction.


Example:

  1. Over the next month, your company has a total sales target of 10.000
  2. You should now identify a previous month, where your company had a similar total sales target.
  3. Then go to "Overview" and select that previous period in the timeline
  4. Now you should find out what your paid media contribution to total sales was during this past month (you can find that number in the Media Generated Sales KPI (see above))
  5. It turns out, that the last time your company had a total monthly sales target of 10.000, your media contribution was 16%
  6. With this in mind, it's fair to input 1.600 as the media sales target for next month's campaign
  7. When your prediction result is done, you will now be informed how much money you need to invest, and how, to generate the 1.600 sales, thereby contributing your share to the total company sales target of 10.000 sales



Illustration: selecting target-based optimization and inserting media sales target for next month's campaign prediction



Another - slightly more coarse - way to go about this, is to simply use the average media contribution over the last 12 months, as an indication of which %-share of total company sales, you should input as the media sales target for your prediction.


Example:

  1. Over the next month, your company has a total sales target of 10.000
  2. To identify your average media contribution to total sales, you select the last 12 months in the "Overview" area, and then check the Media Generated Sales KPI. This will provide a total number, and a %-share of total sales (see illustration above). In this case, your average media contribution for the past 12 months is 14%
  3. As your total company sales target is 10.000 and you have identified that media should - on average - contribute with 14%, the media sales target input for your prediction should be 1.400 (14% of 10.000 sales)


We are of course talking about rough numbers and estimations here, as it's virtually impossible to predict all other factors contributing to total sales. And, if you for some reason believe, that other factors might contribute differently to sales (it's going to rain a lot, your distribution is lower than the previous month, you have been forced to increase the price of your product etc.), you should look to adjust and try out different predicted media sales targets and subsequent required investment levels, to make an informed decision of which investment scenario to put into action.


Note: we are planning to develop a feature, that will help you to more easily generate media sales targets for predictions, taking historical data into account.