How The U.S. Military Optimized Their Marketing Investments

Situation

Optimization Group had previously conducted analyses with a branch of the U.S. Military to estimate how media spending (both investment levels and media mix) contributed to Enlisted Personnel Lead Generation and Contract Conversion. These analyses were based on data from a timeframe before the recent recession (2003-2006).

Years later, in the middle of the recession, we re-evaluated the findings from these analyses and noted a few “blindspots”. One of the key “blindspots” was the impact of the recessionary economy. Several other important “blindspots” emerged.

Objectives

To address the “Blindspots,” additional analyses were conducted to:

• Update the dataset through the current period (2010 year-to-date)
• Understand the likely effects of an economic recovery on the spending levels required to achieve recruiting goals
• Develop understanding of how marketing/media activities impact recruiting of different target audiences (e.g. officers, enlisted personnel, consolidated recruits)
• Identify marketing/media activities with the strongest impact on the Lead-to-Contract conversion

Methodology

We pulled source data from 2003-Current from multiple sources (e.g. U.S. Military Branch, ad agency, external, etc.) and consolidated it into a single database. A variety of statistical and modeling approaches were used, including GMAX™ genetic datamining, Structural Equation Modeling, and standard statistical techniques such as Multiple Linear Regression.

Findings

There is an effective range of total spending

We were able to estimate the range of total spending required to meet goals for leads across two different contract conversion channels. By finding the “elbow points” in the data we identified the point of diminishing returns. In other words, the point where you receive less “bang for your buck” with each dollar spent.

Economic conditions have a great impact on converting contracts

We tested several external variables to see if they were having an impact on contract conversions. Two of the external variables we tested were consumer sentiment and unemployment rate. A few interesting insights stood out. First, consumer sentiment and unemployment rate impacted contract conversion in different ways.

• Unemployment rates impact lead generation
• “Fear” variables (e.g. confidence, sentiment, etc.) have a stronger impact than unemployment rates on converting leads into contracts.

In general we found the combination of sentiment and unemployment interacted with overall spending levels. Even more, consumer sentiment and expectations were more important to contract conversion than actual unemployment rates.

Media and other advertising investments work together as a system

• Many investments (e.g. TV, Internet, Suburban Tour) are effective across multiple target audiences.
• Some channels are stronger at generating leads, while others are stronger at converting leads to contracts

Officer contracts require different media than Enlisted

We identified which media type was most effective for Officer contracts and Enlisted contracts individually.

In case you missed our post yesterday, Optimization Group is now an approved GSA Vendor – meaning that government agencies have a safe and easy way to solicit marketing research services from us.

To learn more about how GSA Schedules work and our government experience, check out our GSA Schedule page.