Return on Media Models

Abstract

The proliferation of marketing media, especially since the advent of digital media, has created an urgent need for marketers to understand their relative importance in generating revenue for their brands. Ultimately, this understanding should result in managers’ ability to project returns from their media investments. This chapter will focus on quantitative methods that enable such media return calculations. We begin with a definition of “return on media” and show how it connects to the need of estimating top-line lift, i.e., consumer response to media, from various data sources. We introduce the standard media-mix response model and discuss the estimation of media response elasticities. We extend these models to include brand-building and customer-equity effects and intermediate-performance variables. Finally, we address return to media in the digital era, with specific reference to path-to-purchase models, and we describe how media returns are derived from sales response models.