Why is Media Mix Modeling Cool Again?

What is Media Mix ModelingMedia Mix Modeling MMM is a statistical analysis used by marketers to measure the impact of marketing across different channels the marketing mix on sales with the goal of understanding how each channel contributes to achieving a brandamp8217s KPIs MMM became widely used in the 1980s with advertisers like PampampG and GE both heavy spenders on TV using computers and large datasets to understand which marketing tactics were most effective in driving sales and to help forecast how additional marketing investments could prop up the bottom line Although it was a valuable tool it fell out of favor because MMM struggled to keep up with the rise of digital marketing particularly as search social and online retail started to grow given the velocity of those channels Separately the industry moved to more precise attribution modelingTaking Marketingamp8217s MeasurementsSince the beginning of advertising on TV and radio marketers have wondered what is the effectiveness of each channel on their marketing plan Today measuring that impact has become increasingly complex due to optionality 55 of US SMB marketers are buying across 3 marketing channels which fragments spending and makes accurate measurement difficult Cookie deprecation is another consideration given that 65 of people are concerned about privacy due to excessive cookie usage which severely limits traditional multitouch attribution methods that rely on cookies Fragmentation and cookie loss alongside tightening consumer privacy laws makes userlevel data tracking and attribution increasingly difficultTraditional metrics like click through rates and impressions or reach and frequency only offer a partial understanding of the effectiveness of your buys Coupled with userlevel tracking privacy restrictions these granular attribution methods are becoming less viable In retail media multiple touchpoints influence consumer decisions and attributing sales solely to digital would overlook the influence of other important branding channels Retail media encompasses everything from onsite activations to sponsored product listings display ads CTV and targeted emails making it challenging to assess each channelamp8217s contribution accurately Plus consumers buy online and offline seamlessly making sophisticated measurement techniques necessary to account for all media buys across different channels and their ultimate impact on salesProgrammatic MMM A Perfect Measurement FitWhile MMM and programmatic media operate at different levels of granularity and focus on distinct aspects of marketing measurement they can be integrated to enhance overall effectiveness especially if you also buy retail media networks MMM is great at providing a holistic view of marketing effectiveness across all channels including traditional and digital media By integrating programmatic media data into MMM analyses advertisers can gain incredible insights into the contribution of programmatic advertising to overall sales performance since MMM considers the synergy between different channels and provides a holistic view of campaign performance MMM offers a comprehensive strategic view on the synergies between different tactics and across fragmented marketing channels signaling a shift towards a more organized macrolevel perspective critical for more performant planning execution and measurement of campaignsThe advantages of MMM39s strategic perspectiveComprehensive PrivacySafe Measurement MMM provides a holistic view of traditional programmatic and retail media performance to identify the incremental contribution of each marketing tactic This allows for better optimization refining targeting strategies or evaluating the longterm impact of dollars invested with actionable insights to drive ROI Nearly 75 of CMOs prioritize immediate commercial growth focusing on datadriven marketing campaigns that leverage technology including predictive analytics to forecast trends and optimize strategies for revenue enhancementSourcethecmocomGranular Analysis Allows retail media investments to be seen through the lens of products sold geos stores and demographics who purchase your products The granularity assists in allowing for targeted delivery of ads and optimizations even creative messaging to specific audiencesForecasting and Planning Analyze historical trends and MMM can forecast future sales performance under a variety of scenarios empowering brands to make informed decisions with realtime trendsNeutrality Unlike single touch attribution models MMM does not have an inherent bias it provides a level assessment of each marketing touchpointamp8217s contribution ensuring fair allocation of credit across all channels including RMNs As data privacy and fragmentation escalate an advanced AIMLpowered MMM approach will provide a futureproof robust path to strategic measurement and investment allocationMMM is one of those trends that deserves a resurgence unlike some of those fashion trends from the 90s Over time MMM can also capture brand equity and customer loyalty metrics to analyze the long term effects of marketing investments In this era of fragmentation and retail media solutions effective attribution is paramount for driving growth and staying ahead of the competition By embracing MMM brands can unlock actionable insights optimize and achieve a deeper understanding of their customersamp8217 journey Now this is a trend I can endorseThis article was cowritten by Oscar Rondon Senior Vice President US Products Partnerships MiQ ampamp Nishant Kakar VP Product US MiQPosted at MediaVillage through the Thought Leadership selfpublishing platformClick the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillageorgMyersBizNet

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Why is Media Mix Modeling Cool Again?

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Oscar Rondon

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