From Budget Cuts to Record Sales: A Telco Successfully Defends Budget to Deliver 150% YoY Growth
How AIOS uncovered the carryover effects of media spend and protected future marketing investments.
In the competitive telecom sector, customer acquisition and retention are crucial KPI’s. A leading Telco client was pressured to cut advertising budgets during the fiscal year-end in November and December.
Motivated by short-term financial targets, the client’s executive team focused on cutting costs, frequently questioning the value of upper-funnel brand spending while failing to scrutinize Search Engine Marketing (SEM) expenses. This placed the marketing team in a difficult position: they knew these cuts could compromise their sales targets, but lacked the evidence needed to prove it.
The client’s usual cuts led to budget reductions of nearly 40% in November and 30% in December, limiting their activity to paid search and some online video advertising. Despite these significant reductions, November unexpectedly achieved the highest sales ever, even surpassing December’s holiday sales.
To make sense of these unexpected results, AIOS was utilized to perform a comprehensive analysis. Through a professional services engagement, the client learned that only 2% of November sales were actually attributable to media served in November! Thirty-one percent of the sales that took place in November were attributable to media served in October, and 38% were attributed to media served June through October.
The findings were further supported by a Google Causal Impact study.
Moreover, using AIOS’ scenario planning capabilities, the team was able to demonstrate that by cutting the budget, the telco effectively missed out on potential revenue, maintaining their originally planned budget could have resulted in 18% higher fourth-quarter sales.
These pivotal insights provided the evidence needed to challenge the prevailing executive mindset about upper funnel budget cuts.
By analyzing ad-stock, the client was able to demonstrate the carryover effect of media spend, justify upper-funnel marketing investment, and safeguard marketing spend in the following year:
31%
of November 2023 sales were attributable to the prior month’s media spend
+18%
more Q4 revenue had the original budget been maintained
150%
YoY growth in Q1 2024 thanks to restored brand spend
Armed with clear evidence of the impact of strategic spending, the client has successfully secured and protected their upper funnel investment for 2024, and has already seen higher YoY results in the first half of the year, outperforming other brands in their portfolio.
Through their knowledge of the carryover effect of upper funnel advertising, the client is now primed to invest more substantially in September and October to maximize returns for Black Friday.
By leveraging AIOS insights, the telco client realigned its marketing strategy to foster more sustainable growth and resilience in a fiercely competitive market.
