Case Overview

A soap brand used SEM approach to estimate long term effects of marketing on brand metrics & sales.

The soap brand had a good visibility of how their marketing efforts were impacting short term sales. They wanted a study to understand the impact these marketing activities were having on their brand attributes – awareness, differentiation, relevance and esteem. Once the impact on brand metrics was available, they wanted to know the volume of long term sales being driven through these brand attributes and through marketing.

Marketing drives short term sales & branding

Marketing impact sales in two ways – directly, boosting short term sales and indirectly – impacting brand attributes that impact sales.

  • Sales driven by branding (long-term sales) is ~40% of total sales
  • Awareness is the biggest driver of long term sales with ~ 50% contribution
  • Short-term & Long-term have a combined impact of ~60% on total sales

The long term impact of marketing on sales is greater than the short term impact of marketing on sales.

Brand attributes drive significant sales volume

Impact of marketing activities on sales is difficult to model. Marketing may drive new users to try out a product – who may stick with the brand for a long period. Additionally, marketing tends to create a brand persona with a specific positioning, emotions, values and meanings. These factors have a far greater impact on sales compared with short term effects - that tend to have a decay effect and last only for a few days (or weeks in some cases).

It is therefore important to know the impact of marketing on short term sales and on brand attributes. However, this requires a two step process – the base sales needs to be estimated after accounting for short term impact of marketing through a standard market mix modeling analysis. The remaining base then needs to be decomposed into long term impact of marketing and base sales.

Impact of marketing on sales is long lasting

Marketing has dual role – to boost sales in the short term and branding attributes like positioning, reach, differentiation and awareness. Branding attributes have a significantly higher contribution to total sales volume than marketing driven sales in the short term.  

However, impact of brand attributes on sales can only be achieved through a two-step process:

a. Impact of marketing on short term needs to be estimated through a market mix study

b. The remaining base needs to be decomposed into long term base and sales driven by marketing activities in long term

c. The long term contributions then need to be mapped to brand attributes like differentiation, awareness etc.