The Granularity Trinity in MMM
Granularity depends on the type of business modeled and the precision of the business question that should be answered. In other terms, what is highly granular for a brand could be shallow for another. But regardless of the degree of granularity the business aims for, it will be done within the boundaries of the granularity trinity. We define the three dimensions of granularity as:
- Customer Segments
These dimensions could be cumulative or mutually exclusive. And the use of a contemporary MMM methodology allows acknowledging and addressing this granularity triangle. This, in turn, will result into higher accuracy, robustness, actionability and more sensitivity to real consumer behavior.
1. Granularity at the variable level:
ROI, contribution and campaign performance vary massively depending on the quality of the media used and the creative execution. Not all campaigns will have the same impact as execution. It is therefore crucial to contextualize the campaigns. Proper contextualization goes beyond the share of budget and extends to campaign execution elements. Campaign splits are now possible at different levels Because many online platforms made impressions and spend available at different data cuts, e.g. Ad Format, Campaign Objective, Ad Id, Placement. This ensures that different campaign execution features are assessed and measured as part of MMM. However, we can’t just measure the impact of media and campaigns as a bucket and ignore the differences at the execution level. Cutting data to the level it was executed at (e.g. platform, creative, the day part, the length, the format, or the delivery) is important to ensure accurate and actionable measurement.
Splitting variables is key for better measurement. It allows the analyst to determine if a particular element, creative for example, has a bigger impact than another. This will translate into adding more variables into the model.