NEWS10 October 2023

Econometrics growing in importance, says IPA report

News Trends UK

UK – Higher inflation and growing disenchantment with digital evaluation techniques are making econometrics more relevant for marketers, according to a report by Adam&Eve global head of effectiveness Les Binet.

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In the report Econometrics and the c-suite, which was published by the Institute of Practitioners in Advertising (IPA) at its EffWorks conference today ( 10th October), said that ratcheting interest rates meant investors were more focused on profits than purpose.

Binet argued that this meant analysing the impact of price is back on the marketing agenda, with econometrics an effective tool for achieving that.

The report also suggested a shift away from ‘last click attribution’ was underway in favour of ‘multi touch’ attribution methods to provide a more ‘balanced’ point of view.

Binet said: “Marketing can have many different goals: to build awareness, to drive traffic, to recruit customers, to increase market share, and so on. But the ultimate goal, for commercial firms at least, is always the same: to generate incremental financial value.

“This is where the value of econometrics lies. It enables us to identify the effect each variable has on sales and profit, even when everything varies at once. There’s no doubt that econometrics is a hot topic right now.”

Laurence Green, director of effectiveness at the IPA, added: “Econometrics is a proven discipline in advertising and communications, but its value as a predictive tool for developing cohesive business strategies across the wider business portfolio and marketing mix from pricing to distribution, portfolio management to budgeting is less well developed.”