A mortgage lender client in the US had a large number of media channels and lending branches that it was allocating media budget to. The distribution of these funds wasn’t done in a systematic way.
Our client posed the following question to us:
Can we develop a system that produces more efficient conversion of marketing dollars into loan volume (and thus, profit) than the status quo?
We adopted an approach similar to that used by mutual funds in maximizing the return of their portfolio – allocate funds to different investments based on their rate of return. Thinking about each different brand and media channel as the options available, we developed an algorithm that rebalanced, on a monthly basis, each branch’s and each channel’s marketing allocation based on their historical ROI.
The RIGHT Answer
We developed a system that utilised historical data to propose future month’s marketing funds allocations.
The budget allocated to each branch and media channel was based on their past contribution to profit.
Media channels and branches were rewarded with more budget for improved results.