266% more ROAS from cutting spend and improving media execution
Need:Cut costs and increase profitability.
Approach:Every media vendor's tracking and tests showed that their media was extremely productive, but sales had been flat for years despite large increases in spending.
By independently measuring changes in media spends and sales over time, it was clear that some medias were ineffective as implemented whereas other medias could be greatly improved if optimized differently.
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Success:
The total media budget was cut by millions, to half of what it had been, and applications grew by 83% over the next 8 months.
The 50% media cutback had a minimal negative impact on sales, given the selective and focused cutting, and the improvements to the more productive media contributed about 10% growth to applications. The remaining 73% growth came primarily from increases in market demand and from some product changes.
It would be easy and a common practice to assign full credit to Marketing for all improved performance resulting in the growth in applications, but we try to introduce a scientific rigor and integrity into our work and help clients succeed through shared and consistent wins. The actual 10% application growth, using half the funds, was a substantial win for Marketing. And a better understanding of how well each media was working set the company on a clear path to growth.