No one would willingly fly in a plane with faulty gauges. No pilot would chance a takeoff without a complete set of working instruments. And yet, the CPGs (Consumer Packaged Goods companies) seem to be flying with faulty gauges to measure their advertising.
For the last twenty-plus years, the CPGs have all been using marketing mix models (in one form or another) as the instruments to inform their advertising and promotion decisions. The promise of these models was that marketers would be able to optimize the allocation of dollars across all of the marketing tools that were available.
But where’s the growth?
Before mix modeling, product development and effective advertising built the iconic brands of the CPG companies. After decades of mix modeling use, how are CPG companies doing? Have the models led to strong, healthy and growing brands? Have advertising practices been honed to a sharper edge? Or, did the promise exceed the delivery? Let’s take a look: