Case Study
Optimization of Digital Marketing Spend
A US-based mid-sized e-commerce business specializing in B
to B product sales.
“Tatras helped us
target the high value
customer acquisition
opportunities while still
reducing wasted
marketing spend.
Tatras has given us the
intellectual and
implementation
firepower to
outperform our
competition in the
market place. It’s been
a game changer for our
organization!”
BUSINESS CHALLENGE
Our client was facing lower profitability due to rising cost of customer acquisition
and decreased margins due to competitive price pressures.
OUR APPROACH
Typically, digital marketing spend is evaluated by looking at profitability per
transaction or other rudimentary metrics. The Tatras data scientists suggested
examining cost of acquisition through the lens of Customer Life Time Value (CLV).
Examination of the data indicated that there were huge variations in CLV, and
therefore large wasted cost in acquiring customers with minimal CLV.
METHODOLOGY
 All data from different sources (order management system, content
management system, digital marketing, clickstream) was consolidated in a
Centralized Data Store.
 We analyzed customer behavior and segmented customers into those who are
more price-sensitive and those who are more likely to migrate to lower-cost
marketing channels.
 Customer segmentation and historical transaction data was used to build a
model to predict the expected CLV of new acquisitions at a segment and
individual product level.
 Expected CLV was then correlated with digital marketing ad spend.
 Rules Engine deployed to include Expected CLV and digital marketing
performance data used to autonomously change bids within digital marketing
channels.
 Tracked the effect of changes on digital marketing performance to
continuously improve rules for bidding.
TECHNIQUES, TECHNOLOGIES, TOOLS
Survival Analysis, Clustering, Regression, R, Java.
1007 Johnnie Dodds Boulevard | Mount Pleasant, SC 29464 | 888.450.3179 | www.tatrasdata.com
TIME TAKEN
Model developed in 4 months; Tatras engaged for continuous improvement &
further optimization.
END SOLUTION
Autonomous bid management system based on Expected CLV and digital
marketing Performance Data to redirect digital marketing spend, prioritizing the
acquisition of customers with higher expected CLV.
IMPACT
30% reduction in marketing budget waste, while extending Customer Life Time
Value by 12%
1007 Johnnie Dodds Boulevard | Mount Pleasant, SC 29464 | 888.450.3179 | www.tatrasdata.com