What is Marketing Mix Modeling?

Marketing Mix Modeling (MMM) relies on statistical methods, namely multivariate regression analysis. It uses as input sales and marketing time series data to estimate the impact of various marketing tactics (marketing mix) on sales and then forecast their impact on future sets of tactics. It is often used to optimise advertising mix and promotional tactics respecting the sales revenue or profit.

CMM is based on the idea of segmenting the market to groups of customers who share similar behavior and reactions to marketing activities. Each one of the obtained segments need to be modeled to get detailed and very specific customer insight. This helps to get more accurate data-driven decisions. By focusing on the consumer segments, marketers will be able to have more targeted messages for each segment and therefore, embracing the customer first approach. Subsequently, this will lead the business to optimize future campaigns on the medium, short and long term.
CMM works at an individual consumer level, it is more actionable; more capable of measuring consumer relationships
with brands; better suited to measuring digital media; and tailored to an increasingly addressable advertising future.
In other words, CMM can measure marketing RoI at more sophisticated levels and is more actionable for the marketer because it can measure marketing RoI at an audience level and therefore direct targeting decisions.

Media mix modelling is an analysis technique that allows marketers measuring the impact of their advertising campaigns based only on media variables to determine how various elements contribute to the evolution of the KPI.

Marketing Mix Modelling on the other hand, includes other variables such as promotion, price, product changes…

When it comes to modelling your KPI, we recommend to include as much variables impacting your KPI as possible so that will give you a holistic and rounded view on what’s really driving your performance.

No its not. Regardless of their sizes, all companies will benefit from adopting MMM. Marketing Effectiveness helps your brand maximize on return and get a deeper understanding of how your business actually functions, what channel works best and what not, and from these insights one can optimize their budgeting plan, maximize their revenues while minimizing their spend. And that can bring more benefits to small entreprises to raise their brand awareness and sales, thus growing the company.

MMM is destined to any media and analytics agency or advertiser no matter the size of the company. The only condition for conducting a MMM analysis is to have enough data (Usually a minimum of 2 years historical data. The data must also be reviewed and validated to be sure of its consistency and accuracy.