Gone are the days—if they even ever existed—when marketing was solely an exercise in developing creative campaigns. Today, the need to truly understand the impact of marketing on sales is essential, not only for planning purposes, but to drive the business forward.
But how can marketers truly understand the marketing return on investment (MROI) of one promotional activity over the next in terms of sales generated? Since measurement calculations are typically averaged across the entire period analyzed, it is a challenge to get precise strategic insights at specific points in time. To move past this, marketers are exploring alternative approaches to MROI, including more advanced econometric modeling techniques that involve time-varying parameters (TVP).