Use Case

Comparing ROI Across Geographic Markets 

Adjusting for Population and Store Distributions to Facilitate Geographic Comparisons of ROI

Use Case: Adjusting for Population and Store Distributions to Facilitate Geographic Comparisons of ROI

The Problem

Marketing leaders need ways to effectively compare ROI across geographic markets. Typical schemes to create comparable metrics use market populations or Nielsen ‘tv homes’ as a basis to divide national advertising spending across the markets. However, these methods ignore the geographic profile of a brand, biasing ROI upward in well-established markets and downward in markets with fewer locations.

The Solution

At in4mation insights, we integrate mix modeling results with a geographic information system (GIS) containing brand-specific customer mobility data. The tool allows us to adjust market-level ROI metrics for the opportunities to buy that are dictated by a brand’s restaurant locations, neighborhood-level population distribution, and consumer behavior.

Results & Key Learnings

Adjusting for population attributes of a restaurant brand’s location profile ensures that national media spending is not over-allocated to growth markets leading to deflated ROI. A population-adjusted ROI metric makes dollars comparable across a brand’s established and growing media markets.

1
ROI is low in markets where a brand is growing because some consumers there do not have access to the product.
2
By adjusting for the market-level populations within the service areas of a brand’s stores, media ROI will reflect how well it performs where product is available.
3
This gives brands a true picture of investment performance in expansion markets and leads to different decision on how to spend there.


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