magic numbers

Econometrics is the most reliable method for understanding the results of past marketing activity. It gives you a cost-benefit analysis of everything you’ve done, so you can see what’s best to do next. Dr Grace Kite's interview with IPA (Institute of Practitioners in Advertising) and LBBonline - Little Black Book is a simple introductory guide, including information on: • Why Martin Sorrell called econometrics the “holy grail” • What the benefits of doing it are • A really simple example of how it works • Why it’s better than attribution, especially last click So if it’s something you’ve always wondered about have a read, link in comments.

The great X-scape? As Elon Musk’s X has steadily reduced features and moderation in the name of free speech – and Musk has become more involved with Donald Trump’s presidential campaign – it seems that more and more users are becoming ex-Xers. The chart shows the scale of the migration away from X. Daily active users of X (the number of people actually opening the app and scrolling through it) has been on a long decline. It was down 30% in the UK by September this year compared to May 2023. As events have transpired this week and Elon Musk has been appointed co-head of the Department of Government Efficiency (Doge), this decline has accelerated massively. It is a loss to the media stack, particularly for B2B businesses that valued being involved in the professional conversations that took place on twitter. So where should those businesses go now? Well, it depends on where the users are going! Mark Zuckerberg’s Threads seemed like an obvious choice after its initial extreme growth back when it was launched in mid-2023. There were over 100m new members in its first week! But, Threads’ growth in number of users has stalled hard since. By contrast, BlueSky, launched by twitter founder Jack Dorsey had a very slow launch, with essentially your-name-on-the-guest-list required to actually get on it. Right now, though, it looks like BlueSky is winning out in having more appeal to X-iters looking to find a social media experience similar to what Twitter was before Musk’s takeover. So, if it reaches a critical mass, it’ll be more able to step into the rather specific breach left by the little blue bird. Have you had thoughts about ghosting this X?

Want to make your marketing budgets work harder and be more measurable? Our lovely Joy Talbot is speaking at Funnel’s event on Wednesday 20th November - link in comments to secure a free ticket! She’ll be answering the question “how should we rethink measurement and MMM models to better allocate marketing budgets and drive returns across all channels in 2025?” If you want to understand: • Strategic channel investment • Optimising performance • Marketing Mix Modelling ready data • Maximising ROI with data Then you won’t want to miss this, final tickets available now!

Is influencer marketing right for you? The chart is from a big new survey by YouGov that asked over 10,000 respondents all around the world all about influencers. It shows the topics where influencers are particularly, ahem… influential. Around 60% of people find influencer content on travel, fitness, tech, and fashion useful. So, these products are good contenders for a strong effect of sponsored content on sales. At the other end of the scale, the topics we don’t want at dinner parties are also the ones we avoid in conversation online: Politics and religion content is seen as the least useful. But be careful, because culture matters. For example, in Indonesia, 86% of respondents find travel content useful compared to only 36% of Danish respondents. It’s all part of emerging learning about how best to use influencers. Other recent gems include a report by The Drum that Gen Z audiences trust influencers more than celebrities. And one to treat with some caution from the influencer benchmark report, which shows the average payback from influencers is $5.78 per $1 dollar spent. If you’re not yet ready for big business brand-building, but worry you’re too reliant on performance marketing, influencers, just like online video can be a low-cost route to a new phase of growth. Find out how to tackle it in our super practical, accessible, and no-nonsense Scaling Up Works course. There’s still time to sign up via the link in the comments or chat to Imogen Howard for group bookings or questions via hello@magicworks.training

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It’s a slippery slope… Moving money from traditional budgets into search ads on retailers’ sites, is like paying the rent out of your savings. It can only lead to poverty ahead. It’s because retailers, and especially Amazon, control such a large share of product buying traffic, you have to be there if you want your product to be available to buy. This means they can charge what they like. The chart shows that, aside from a COVID blip, it’s costing UK businesses more and more of their revenues and profits, each year. The slippery slope comes because the only way to avoid continuing to pay as prices for this type of ad go up is to invest into your brand. Because if people want your product before they get to the search page, any set of search results for the category which doesn’t include you is “wrong”. And auction algorithms, which value relevance as well as advertising revenue, will allow you to be there for a reasonable price.💰 So don’t plunder your TV or out of home budget to pay retail-media rent in 2025. Instead, make the case now that this must be paid for out of the distribution or merchandising budget. Dr Grace Kite's latest article, link in comments, is all about this challenge, and how to navigate it in the coming years. 🚩 If you want to avoid paying for online ads that you don’t need and get the balance of brand and performance right, you should join our course Scaling Up Works, starting today! Final chance to sign up is 28th October. And if there’s a few of you that need to learn, speak to Imogen Howard for group bookings or questions via hello@magicworks.training.

📢Scaling Up Works onboarding week starts today!   Want to balance brand and performance right and identify successful, low-risk, achievable routes into building demand?   Join us on our online training course Scaling Up Works with Dr Grace Kite.   It’s all about how to unlock a new phase of growth without the need for bigger budgets. And how to take a business whose love language is numbers through the transition that’s needed.   Including:   • Relevant frameworks • Modern case studies • Practical methods • Benchmarks from the experience of hundreds of other businesses   It’s hands-on, practical training that fits in with your schedule.   So you can put your money where the magic is.   🚩Sign up via the link in the comments or email Imogen Howard via hello@magicworks.training for group bookings or questions. Last chance to sign up is 25th October.

If you want a bigger marketing budget you’ve got to be able to talk turkey.🦃 Marketers who measure and report return-on-investment are 1.6 times more likely to get a bigger budget. Put yourself in your CFO’s shoes. He or she isn’t a baddie, just a practical numbers person that wants to do the things that’ll make the company grow and avoid taking too many risks. The job is to adjudicate on an inbox full of 100 different things the company might buy, from machines in the factory, to an R&D hire, to a better fleet of delivery vans. And every time something is approved it comes out profits and makes that all important P&L look worse, at least for a time. The decision to approve is about two things: The likely payback and the chances that the person asking the money will manage this expenditure well. Measuring ROI ticks both of those boxes because it not only quantifies the benefits of marketing, it also shows that you’re doing the work to learn and improve how you do it. 🚩If you want to learn more about advertising ROI, including how to do a rough estimate for yourself, how to commission analytics for an accurate read, and how to avoid pitfalls, you should join our Data Works course. There’s still time to sign up, the final deadline is 18th September. Link in comments to book now. Got questions or a group? Chat to Imogen Howard via hello@magicworks.training and she’ll help you out. For econometrics/MMM drop Dr Grace Kite a message.

New and fresh from the IPA Effectiveness Conference! A free tool, to help you huddle with finance and come up with the best possible 2025. Finance are not the baddies. They care about doing the best for the business, perhaps even more than you do. But they get soooo many business cases for spending the company’s money and it’s a task to prioritise all the options. When you put forward your marketing plan, finance has to decide whether that’s a better use of the money than something else. So, show a bit of sympathy for the devil…. ahem, no… some empathy for finance. And help them out. Our new tool, jauntily named “compare the cashflow” uses a framework that finance love – called discounted cashflow – to make it super easy to compare a media plan to an R&D project, or a new factory.🏭 Depending on your category, media mix and creative quality, it gives you an estimate of expected revenue over the next three years and accounts for cashflows in the future being worth less than today. It then compares against another investment of your choice. Just work with finance – they don’t bite – to input the expected return and risk level and let the tool do the rest. 🚩Link in the comments to a bundle of useful stuff. The tool itself, a little video to help you use it, and Dr Grace Kite's slides from the conference.

Better creative, better ROI. Simples! The chart above shows that there really is something about ads themselves that determine whether campaigns will pay back, and if so, how much. System 1’s star and spike scores are established before ads even air, they measure what audiences feel when seeing an ad, and, as the chart shows, that predict payback. The chart comes from a study with WARC, but we’ve seen it at magic numbers in our econometrics too. Like the FMCG that had three different creatives before, during, and after COVID-19: • The first, pre-pandemic, had close ups of people using the product, it had a weak creative quality score, and in econometrics a short-lived effect and weak ROI • The second was about how this business was mucking in to help in the pandemic. It had a good creative score, a longer-lived effect and a middling ROI • After COVID, with a new CMO and a new agency, the third campaign was full of family stories and it had happy music. It had a great creative score and a stonking ROI. So, here’s the useful bit, the thing you can do differently: Make great ads. If you don’t know how, our course Scaling Up Works won’t be much use to you. Try Orlando Wood’s course or James Hurman’s course. Scaling Up Works is for people who need to get this sort of campaign agreed in the first place, and need to choose the right media channels to use, for the perfect mix of brand and performance. 🚩If that’s you, the start date is 15th October and you can contact Imogen Howard via hello@magicworks.training for questions or group bookings.