[ LONG-TERM VALUE ANALYSIS ]

Consumer packaged goods (CPG) manufacturers spend billions each year on advertising, trade promotions, and consumer promotions. Traditional marketing response modeling has effectively demonstrated how to isolate and quantify the short-term effect of these marketing investments; but Knowledge Networks has found a method to quantify the long-term value of these efforts.

Conventional models based on scanner data can only attribute sales to marketing stimuli in the short-term period; effects are quantified, but not "explained." The question of how marketing levers really influence consumers remains unanswered.

By moving beyond the examination of scanner data, our Long-Term Value (LTV) analysis uses transaction-level household panel data to identify new versus previous buyers prompted to purchase from the various marketing stimuli. A dominant marketing stimulus is identified for each buyer. Actual purchase behavior following their initial purchase is captured with each purchase, and the future purchases from those new buyers are recognized as the long-term sales due to the "trial-driving" or "repeat driving" marketing stimuli.

The purchase behavior of these groups of buyers is modeled over time so that reasonable projections of the long-term value of the marketing stimuli can be made beyond the analysis period.

FEATURED INSIGHTS

• Combining Creativity & Accountability to Make the Most of In-store Marketing
  Ron Breeden and Al Halkuff
• Discovering Untapped Value in Frequent Shopper Information
  Pat Millea