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  • Writer's pictureProgrammatic Guide

Why Marketers Should Use A Test & Learn Framework

Updated: Oct 18, 2017

Marketers have greater access to data than

ever before. Whether the data comes from third party marketplaces or from first party sources including DMPs and CRM systems, the sheer volume can be daunting to manage and activate. Coupled with the increased volume of data, marketers now have to navigate a landscape with hundreds of ad tech vendors ranging from the major DSPs to point solutions. Concerns over quality and transparency further muddy the waters making it hard to determine the effectiveness of each strategy.

Frenetic Consumer Behavior

Consumer behavior is also changing and their digital lives are increasingly fragmented across devices and geographies. Simply put, the velocity of digital advertising is increasing at a rapid pace. Despite all this change, planning and measurement models have seen limited innovation.

Outdated Buying Practices

Typical digital media planning cycles still operate on a quarterly or monthly cadence. The lag time from plan creation to media buying to measurement makes it hard for marketers to truly know where to invest next and why. With an increased demand for cost savings and the rise of zero-based budgeting it's important to be able to answer these questions accurately.

A Better Way

With the near real-time nature of programmatic technology, marketers should consider adopting a data driven test & learn strategy that shortens the feedback loop and ultimately helps them make better decisions. Innovative companies such as Netflix and CapitalOne have already adopted these practices across their entire organizations and should serve as examples of what best in class digital innovation looks like.

Here's an example of a test & learn framework that can drive an innovative digital strategy:

1. Aggregate - collect and organize data from 1st and 3rd party sources including CRM, DMP, media data, website, and app.

2. Analyze - look for trends and opportunities including demographic signals, past purchase behavior, and device level engagement.

3. Hypothesize - based on the analysis determine testing variables across four major dimensions: creative concept, audience, device, and tactic.

4. Activate - target according to the testing hypotheses ensuring that buying is structured and organized.

5. Measure - compare results with prior outcomes and other strategies. Ideally measure based on business outcomes (e.g. sales or ROI) instead of media metrics (e.g. CPA or CTR).

6. Optimize - remove low performers and increase scale where the results dictate.

Circle back to step 1

A Call To Action

Marketers should consider using a framework like this to govern media investment strategies instead of planning and iterating in fixed intervals. These test & learn frameworks work best when they're part of an evergreen strategy that dynamically adjusts for market conditions and consumer demand. This paradigm shift moves the focus from media plan or campaign level results to business outcomes. The resulting granularity helps marketers make smarter decisions by honing in on the specific data sets, creative concepts, consumer devices, and media tactics that drive results.

With 2018 marketing planning in full swing, consider adopting this model to drive innovation. Ultimately, using data and technology to make informed, timely decisions will lead to improved ROI and a better customer experience.

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