Increase efficiency with Models, Applied in online advertising scenario

WSJ has an article about Chrysler’s use of

Modeling Tools Stretch Ad Dollars

Chrysler Uses Digital-Response Data to Adjust Commercials, Drive Web Visits


With a reduced advertising budget and a desperate need to increase sales, Chrysler is relying more heavily on new technologies to predict how ad purchases will translate into sales.

A team of statisticians, economists, software engineers and media planners at Chrysler's digital marketing agency, Organic, has designed a "media modeling" system that helps the company calculate the best ways to allocate its marketing dollars. The system calculates how much ad spending is needed to meet certain sales targets and then analyzes how both online and offline ads affect Web activity and, ultimately, sales.

Car makers and other companies have used forecasting tools for years, but digital ads have ramped up the systems' sophistication and accelerated reaction time to the data gathered.

[chrysler ads and digital marketing]

Chrysler is using digital-ad agency Organic to try to make the most of its marketing. Organic's technology was used in Chrysler's campaign to promote the new Dodge Ram truck, shown above in a video.

"As a marketer, it helps me be smarter about the dollars I need to reach the sales goals we are responsible for," says Susan Thomson, Chrysler's director of media and events. "It gives you some science."

What does this have to do about data centers is the economic use of dollars to get value. Organic is creating models of how people will  interact with media.

In refining its model, Organic learned how certain ads spur people to visit the Web. It then figured out which Web activities translate into actual auto sales. Some actions, such as scheduling a test drive online or entering a ZIP code to locate a dealer, are a good predictor of sales. Other actions, such as pricing a vehicle or playing with the colorizing features on the site, occur earlier in the shopping process and aren't a direct indicator of serious buyer interest.

The result was a system that predicted 2008 sales within one percentage point of actual sales figures for its Jeep brands, Chrysler says.

And, these ideas are good to think about how models can be created for how users interact with data centers.

Organic modeled the allocation of money


vs. the old way