How Much Media Is Too Much? Getting to the Bottom of ROAS with Nucleus Scenario Planning
A leading household appliance brand struggled to allocate ad spend across agencies and tactics for a new product when first quarter sales came up short. The team was under constant scrutiny from leadership to justify the returns to seemingly runaway spend. While the team managed to weave together a dashboard of performance marketing KPIs, its conflicting messages made it impossible to disentangle the interacting factors like holiday season, changing media agencies, and discounts that appeared to sway sales dramatically. The team was split on the impact of incremental spend, and couldn’t align on how to invest, and justify, their remaining marketing budget.
The team first entrusted a huge budget to a respected digital media agency. The agency’s pre-holiday push spent millions for limited sales, but holiday sales were surprisingly strong. The team was mystified and desperate for answers. Their dashboards–confounded by the interaction of spend, seasonality, and discounts–were no help. The team organized a bake off with another digital agency in the spring. However, a surprise uptick in sales invalidated their results, and kept them in the dark on how much to spend and when.
Nucleus Scenario Planning gave the team the tools to objectively monitor agency performance, right-size the budget, and optimize allocations across agencies and tactics. They were able to see both the tactic mix and the timing were problems. By disentangling concurrent causes and quantifying how ad effectiveness and saturation contribute to profit, the team was armed with hard numbers to successfully justify a new budget and allocations to leadership. The new plan resulted in a massive 411% increase in ROAS.
Better Decisions on Ad Spend
- Cut significant spend without affecting sales by identifying the true low-season weeks
- Identified oversaturated tactics to reallocate worthless spend into those yet to hit diminishing marginal returns
- Focused on awareness tactics identified to actually deliver top-of-funnel acquisition
- Solved the confusion of an unclear bake-off by providing a true benchmark of each digital agency’s ability to create ROI