Channel Performance

Evaluating Individual Channels

Channel performance analysis uses decomposition to understand which marketing channels drive the most value and how to optimize the mix.

Purpose: Assess individual channel effectiveness, compare performance, and identify optimization opportunities.

Key Performance Metrics

Total Contribution

From Decomposition:

Sum of channel contribution across all time periods

Example:
TV Total Contribution (12 months): $600,000

Interpretation: Total incremental value created by the channel

Average Contribution per Period

Calculate:

Average = Total Contribution / Number of Periods

Example:
TV: $600,000 / 52 weeks = $11,538/week average

Use: Compare consistent impact across channels

Contribution as % of Total

Calculate:

Channel % = Channel Contribution / Total Marketing Contribution

Example:
TV: $600K / $2M total marketing = 30%

Use: Understand channel mix and concentration

Channel Comparison Framework

Absolute Contribution

Rank by Total Impact:

Rank	Channel	Total Contribution
1	TV	$600,000
2	Digital	$500,000
3	Radio	$200,000
4	Print	$100,000

Insight: TV creates most absolute value

Efficiency (ROI)

Rank by Return per Dollar:

Rank	Channel	ROI
1	Digital	200%
2	TV	100%
3	Radio	80%
4	Print	25%

Insight: Digital is most efficient despite lower absolute contribution

Balancing Impact and Efficiency

2x2 Matrix:

High Contribution, High ROI → Invest More
  - TV, Digital (priority channels)

High Contribution, Low ROI → Optimize
  - Large spend, needs efficiency improvement

Low Contribution, High ROI → Scale Up
  - Test increasing investment

Low Contribution, Low ROI → Cut or Fix
  - Print (reassess or eliminate)

Performance Patterns

Consistent Performers

Characteristics:

• Steady contribution over time

• Reliable baseline impact

• Low variability

Example:

Digital Search:
Every week contributes $8K-$12K
Average: $10K
Std Dev: $1K (low variance)

Strategic Value: Reliable, predictable, foundational

Campaign-Driven Channels

Characteristics:

• Spiky contributions

• High during campaigns

• Lower in off-periods

Example:

TV:
Campaign weeks: $30K contribution
Non-campaign: $5K contribution
Highly variable

Strategic Value: Flexible, event-driven, high-impact bursts

Growing Channels

Characteristics:

• Increasing trend over time

• Improving efficiency

• Rising contribution

Example:

Social Media:
Q1: $20K/month average
Q4: $40K/month average
100% growth

Strategic Value: Momentum, opportunity, scale potential

Declining Channels

Characteristics:

• Decreasing contribution

• Worsening efficiency

• Potential saturation

Example:

Radio:
Q1: $25K/month
Q4: $15K/month
-40% decline

Strategic Action: Investigate, refresh strategy, or reduce

Channel-Specific Analysis

TV Performance

What to Evaluate:

• Contribution during flight periods

• Carryover effects (adstock)

• Diminishing returns at high spend

• Brand-building vs. direct response

Common Patterns:

• Large absolute contribution

• Strong carryover (high adstock)

• Moderate ROI (100-150%)

• Better for brand awareness

Digital Channel Performance

What to Evaluate:

• Search vs. Social vs. Display

• Prospecting vs. Retargeting effectiveness

• Platform-specific performance

• Attribution complexity

Common Patterns:

• Higher ROI (150-300%)

• Lower carryover (lower adstock)

• More granular optimization

• Direct response focused

Traditional Media (Radio, Print, OOH)

What to Evaluate:

• Contribution relative to declining spend trends

• Geographic/local effectiveness

• Complementary effects with other channels

• Audience reach and frequency

Common Patterns:

• Moderate contribution

• Declining efficiency in many markets

• Strong local/regional impact

• Older demographic reach

Performance Diagnostics

Why Is a Channel Underperforming?

Possible Reasons:

1. Insufficient Spend:

Channel has low contribution because spend is minimal
Solution: Test increasing investment

2. Poor Creative/Messaging:

High spend but low contribution
Solution: Refresh creative, test new messaging

3. Wrong Audience/Targeting:

Reaching wrong audience
Solution: Refine targeting, reconsider channel fit

4. Saturation:

Diminishing returns at current spend level
Solution: Reduce spend, optimize frequency

5. Wrong Timing:

Running campaigns at suboptimal times
Solution: Align with peak demand periods

Why Is a Channel Overperforming?

Possible Reasons:

1. Underutilized Opportunity:

High ROI suggests room to scale
Action: Increase investment carefully

2. Optimal Creative:

Strong messaging resonating
Action: Maintain, replicate across periods

3. Market Timing:

Channel particularly effective in current environment
Action: Capitalize while conditions favorable

4. Complementary Effects:

Benefits from other channel activity
Action: Coordinate campaigns across channels

Competitive Benchmarking

Compare Your Performance to Benchmarks:

Industry Standards (Example - E-commerce)

Channel	Typical ROI Range	Your Performance
Search	150-300%	250% ✓ On target
Social	100-200%	180% ✓ Good
Display	80-150%	90% ✓ Acceptable
TV	80-120%	60% ⚠️ Below average

Insight: TV underperforming vs. industry standards - investigate why

Internal Benchmarks

Compare to Your Historical Performance:

Digital Performance:
Last Year: 180% ROI
This Year: 220% ROI
Change: +22% improvement ✓

Insight: Digital strategy is improving over time

Channel Mix Optimization

Current Mix Analysis

Spend vs. Contribution:

Channel  | % of Spend | % of Contribution | Efficiency Gap
TV       | 40%        | 30%               | -10% (over-invested)
Digital  | 35%        | 45%               | +10% (under-invested)
Radio    | 25%        | 25%               | 0% (balanced)

Insight: Shift 10% from TV to Digital for better efficiency

Optimal Mix Scenario

Model Reallocation:

Proposed Change:
TV: $400K → $300K (-$100K)
Digital: $350K → $500K (+$150K)
Radio: $250K → $200K (-$50K)

Expected Impact:
TV contribution: -$100K (at 1.0x ROI)
Digital contribution: +$300K (at 2.0x ROI)
Radio contribution: -$50K (at 1.0x ROI)

Net Impact: +$150K incremental contribution

Testing New Mix

Phased Approach:

1. Start with 5-10% shift

2. Monitor performance for 2-3 months

3. Adjust based on results

4. Scale to full reallocation if successful

Performance Tracking

Week-over-Week Monitoring

Track Changes:

Week 10:
Digital contribution: $18K
Digital spend: $8K

Week 11:
Digital contribution: $22K (+22%)
Digital spend: $9K (+12.5%)

Analysis: Contribution grew faster than spend (good sign)

Month-over-Month Trends

Identify Patterns:

Q1 Average: TV = $45K/month
Q2 Average: TV = $52K/month (+15%)
Q3 Average: TV = $48K/month (-8%)
Q4 Average: TV = $60K/month (+25%)

Pattern: Strong Q4 seasonality, consistent baseline Q1-Q3

Campaign-Specific Performance

Isolate Campaign Impact:

Black Friday Campaign (TV):
Pre-campaign baseline: $40K/week
Campaign weeks: $90K/week
Lift: +$50K/week
Duration: 3 weeks
Total incremental: $150K

Campaign spend: $100K
Campaign ROI: 50%

Channel Portfolio Strategy

Core vs. Opportunistic

Core Channels (Always On):

• Consistent performers

• Reliable ROI

• Foundation of strategy

• Example: Search, Email

Opportunistic Channels (Tactical):

• Event-driven

• High impact when used

• Not continuous

• Example: TV campaigns, Sponsorships

Risk Diversification

Balanced Portfolio:

60% in proven channels (TV, Digital Search)
30% in growth channels (Social, Video)
10% in test channels (New platforms, Podcasts)

Concentrated Portfolio (Higher Risk):

80% in single channel (Digital)
20% in secondary channels

Risk: Over-dependent on one channel

Action Planning by Performance Tier

Tier 1: High Performers (ROI > 150%)

Actions:

• Increase investment carefully

• Test scaling incrementally

• Maintain creative quality

• Monitor for saturation

Tier 2: Good Performers (ROI 100-150%)

Actions:

• Maintain current levels

• Optimize within channel

• Test efficiency improvements

• Stable backbone of mix

Tier 3: Underperformers (ROI 50-100%)

Actions:

• Investigate root causes

• Test optimization strategies

• Consider reducing investment

• Set improvement timeline

Tier 4: Poor Performers (ROI < 50%)

Actions:

• Strongly consider cutting

• Run last-chance optimization test

• Reallocate budget to better channels

• Exit gracefully if no improvement

Channel Recommendations Template

For Each Channel:

Performance Summary:

• Total contribution

• ROI

• Trend (growing/stable/declining)

Key Insights:

• Strengths

• Weaknesses

• Opportunities

Recommendations:

• Specific actions

• Investment level changes

• Optimization strategies

Expected Impact:

• Quantified improvement

• Timeline

• Success metrics

Example:

Channel: Digital Search

Performance:
- Contribution: $500K (25% of total)
- ROI: 200% (highest in portfolio)
- Trend: Growing +15% YoY

Insights:
+ Consistently high ROI
+ Growing contribution
- May be reaching saturation at current spend

Recommendations:
1. Increase budget by $100K (+20%)
2. Test new keyword categories
3. Improve landing page conversion

Expected Impact:
- Additional $150K contribution
- Maintain ROI above 180%
- Implementation: Q3 2024

Summary

Key Principles:

Measure What Matters:

• Total contribution

• ROI

• Trends over time

• Consistency vs. variability

Compare Meaningfully:

• Against other channels

• Against benchmarks

• Against historical performance

Make Decisions:

• Invest more in high performers

• Optimize or cut underperformers

• Test and learn continuously

Balance Portfolio:

• Efficiency vs. absolute impact

• Risk vs. return

• Short-term vs. long-term

Next Steps:

• Analyze your channel performance

• Identify top 3 opportunities

• Develop action plans

• Monitor and iterate