Marketing Mix Modeling In Simple Words
If you wonder what is Marketing Mix Modeling (MMM), read no further as this is what you should know…
So, what is Marketing Mix Modeling ?
The answer is simple and straightforward: Marketing Mix Modeling is the art & science of using sophisticated statistical analysis to measure the impact of marketing channels on sales or any other chosen KPI. Hence it is a useful tool for pretty much any company who invests in Marketing!
Modern firms invest a considerable percentage of their turnover in marketing: ranging from offline media (TV, Radio, Press, Magazines, billboards…) to product placement, in-store promotions to name a few. One should also be aware of the increasing share that Digital spend is taking as internet became a very attractive and cost effective channel to use.
Companies know how much money they invest in the different marketing channels but most of the times don’t have the necessary tools to investigate the return on investment and especially the efficiency of each individual channel taken individually.
And that is exactly where Marketing Mix Modeling enters into play. Using an analytical approach based on the historical data captured by the company and its agencies (e.g. sales, point-of-sale promotions, Offline and Online spending…), the Marketing Mix Modeling establishes and quantifies the relationships between the different variables and the sales (or any chosen KPI). The technique used is mainly the statistical regression where a model is created to replicate how consumers responded to the different Marketing Stimuli.
Given the complexity of the consumer behaviour and the media clutter characterising today’s markets, creating such a model is far from being an easy task. It usually takes a highly experienced analyst or “econometrician” to build a model as close-to-reality as possible. Choosing the right variables to add to the model depends on the sector, the company, the market and the consumer targeted by the modelled product. Devising the final model does not only rely on statistical criteria as a big part of it comes from the modeler’s experience which makes modelling a mixture of science and art.
Marketing Mix Modeling could be performed by different stakeholders. Some companies prefer to have their own in-house teams that analyse & model all the data collected and turn it into insights to optimise future returns.
Media agencies could also have their own Marketing Mix Modeling division offering modelling services to their clients and hence take their media planning to the next level.
Last but not least, specialized Marketing Mix Modeling agencies are stand alone entities that offer independent modelling services to companies that prefer not have an in-house team or media agencies to complete this exercise and that is where MASS-Analytics sit.
Our Marketing Mix Modeling Software Solution
MASS-Analytics are proprietary of the advanced technological platform “MassTer”, an intuitive and integrated Marketing Mix Modelling Software that allows to run an end to end MMM project. This gives MASS-Analytics a considerable edge compared to the independent Marketing Mix Modeling agencies existent in the Market.
Thanks to MassTer, MASS can service any of the three cohorts described above:
- Clients who have their own Marketing Mix Modeling teams can licence MassTer to run econometrics’ projects faster, more cost effectively and more consistently
- Agencies could licence MassTer to perform high quality and quicker modelling for their clients.
- Clients who want to go down the Consultancy path can find in MASS-Analytics the right team and tools to model their data
Convincing company executives to re-allocate budget from TV to Digital Media or increase the marketing budget by 10% becomes an easier task as it will be based on evidence extracted from the company real data and backed up by compelling charts and optimisation scenarios.
Thanks to Marketing Mix Modeling, forecasting the future performance of campaigns becomes finally a click away matter.