Predictive Targeting In Digital Media Marketing

I was just reading an article on MarketingProfs.com that was talking of leveraging a technique called “CARVER” (reminds me of Thanksgiving!) used by the military to “identify and prioritize” targets (“How to Target Your Prospects With Military Precision” http://www.marketingprofs.com/8/target-prospects-with-military-precision-meachum.asp?sp=1). This won’t be the first time ideas from the military have been leveraged in business ‘warfare’. In fact Precitive Trageting is exactly the area where another concept from military surveillance has been used- Receiver Operating Characteristic Curves or ‘ROC’ Curves. ROC Curves are used to evaluate how well predictive models are able to identify targets that are most likely to respond to specific media tactics. The concept is based on the effectiveness of Radars to identify targets by sifting signal from noise. ROC curves are used to evaluate econometric models that identify prospects that are most likely to respond to media tactics. Wikipedia has a good explanation of this approach: http://en.wikipedia.org/wiki/Receiver_operating_characteristic_curve. Although the CARVER concept is interesting, the optimization of the weights for each factor seems a bit subjective inc comparison to the scientific precision provided by an econometric model. This link provides a fairly decent expanation of the method: http://www.ni2cie.org/targetanalysis.php.htm
Compared to the subjective approach utilized here, an econometric model not only helps identify most opportunistic targets, but also quantifies specific relationship between probability of response to marketing and amount invested in each media tactic available. Of course to do this successfully you do need a training sample based on historical programs, so if the CARVER approach doesn’t need any historical data, there may be something there.

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