Some extracts from a recent key destination

Media Mix Model

Client Situation and ChallengesTicket sales for a major tourist destination had stabilised whilst marketing spend which started pre-

launch had continuously edged upwards across a broad mix of channels.

The challenge for the client management team was to understand:

1. The extent to which media investments in driving visitors and ROI

2. Media saturation and diminishing returns

3. Long term brand building effects from media spend

4. How to grow ticket sales by optimising spend allocation

Objectives

Build a predictive econometric model to evaluate the financial ROI of media spend in driving ticket sales

for the brand X tourist destination.

A secondary objective was to provide guidance on how a reallocation of spend across media channels

will help to increase tickets sales and revenue into 2014.

Please note: all data points have been altered to preserve client confidentiality

Overall Media contributions

Overall, media and marketing have contributed to around 22% of ticket sales revenue. Of this,

online paid and owned (website) media have contributed 5%. Offline media channels have jointly

contributed to the remaining 5%. Long term media carryover effects are evident accounting for

12%.

Baseline sales driven by seasonality, inbound & domestic tourists, events and consumer confidence.

Overall contribution from marketing and media activity

Significant long term media effect on

ticket sales

Overall Media contributions over time

Grand opening

Pre-opening marketing and media generated a heightened level of exuberance and a long term

effect from media and marketing.

Significant long term media effect on

sales.

Baseline = seasonality, tourist numbers, city events and consumer confidence

Full Media Spend Optimisation – Constant Spend

This optimised allocation will lead to a 5.2% increase in ticket sales. This solution suggests cutting back

on TV and outdoor and reallocating that same spend on other media channels. Any website related

spend should be focused on search optimisation. Annually, this represents approximately 32,166 more

ticket sales. At stable prices and economic conditions, this would approximate to £771,973 of additional

revenue.

£1,639,139 £1,639,139

Guidance on future integrated media execution

43%

Using our simulated modelling results we have assessed media interactions and the resultant payoff. This

insight provides us with steer into future integrated campaign executions.

49%

Radio and Press are most effective when

activated together. There is about a +43%

synergy or additional lift due to simultaneous

activation.

Online and Radio are most effective when

activated together. There is about a +49%

synergy or additional lift due to simultaneous

activation.

Modelling Accuracy and Validation

Model accuracy is measured by R2 – this is measure of the variation in actual sales that is explained by the modelled series in Red.(pooled)

Our final econometrics model has produced a very accurate representation of actual historic ticket

sales. We held out 10% of the data to test for forecast validation which is also very high.

Overall Model Accuracy is 98%

Model Forecast Validation Accuracy is 97%

Appendix 1: Consumer Confidence and Ticket Sales

This is a statistically significant improvement in the confidence metric between April 2013 and Aug 2013.

Slight drop into Q4 2013, but up in 2014

Michael Wolfe

CEOBottom Line Analytics GlobalE: mjw@bottomlineanalytics.comM: 770.485.0270

www.bottomlineanalytics.com

Masood Akhtar

Partner, Analytics (EMEA)Bottom Line Analytics GlobalE: ma@bottomlineanalytics.comM: +44 7970 789 663

www.bottomlineanalytics.com