Module 7: Isolating Your Activity: Non-Econometric

Question 1

Why is it important to isolate your activity?

Answer 1

If you don’t know what your activity is doing it’s impossible to evaluate and know whether you should repeat it, whether you should tweak it, them or whether you should just drop it from the marketing budget for the next period.

Question 2

What is the most reliable method to use to isolate the

effect of the campaign on sales and profit?

Answer 2

Econometrics

Question 3

What is econometrics and what does it do?

Answer 3

Econometrics combines economic theory with statistics to analyse and test economic relationships.

Question 4

When should you not use econometrics?

Answer 4

1. When you don’t have all the data.
2. When you don’t have the time
3. When use you don’t have the budget.

Question 5

Why might you use non-econometric techniques in addition to an econometric model?

Answer 5

The most convincing evaluations use both econometric techniques and non-econometric.

Question 6

What are some common non-econometric general factors that you might consider?

Answer 6

• Seasonality
• Special events e.g. sporting events
• Political and cultural changes

Question 7

Why won’t using non-econometric factors achieve the level of certainty that econometric modelling would?

Answer 7

Econometrics takes into account almost every factor affecting sales and apportion a scale of impact to each.

Question 8

What are some common misconceptions when it comes to measuring direct response campaigns?

Answer 8

1. “Without the campaign there would have been no response at all” - Highly unlikely
2. “Direct response campaigns only have a short-term effect…” - Short term direct response accounted for only around 10% of the total response to the campaign

Question 9

Name 3 types of correlation techniques.

Answer 9

1. Correlations over time
2. Regional correlations
3. Individual personal correlations