What is Mix Marketing Modeling and how can it help brands?
With the development of the internet and new technologies, advertisers’ interest in digital marketing, and the variety of possible communication channels and formats, continue to grow, as evidenced by the SRI 2021 report, which shows ever-increasing investments in online advertising.
However, traditional media are still of great interest, whether it is for pure brand awareness with channels such as billboards, radio, press, television, or flyers.
Therefore, combining the offline dimension with the online dimension of marketing is a constant challenge for advertisers in 2022. A challenge that can be addressed and supported by Mix Marketing Modeling, a concept in full renaissance, at the crossroads of media, statistics, data science, and artificial intelligence.
What is Mix Marketing Modeling?
Mix Marketing Modeling or MMM refers to the modeling and the measurement of marketing performances. It is an econometric study that consolidates and correlates (or at least tries) media activations with actual performance and sales.
Modeling a Mix Marketing for an advertiser means trying to determine the effectiveness of marketing campaigns and activations by:
- measuring the success that has been generated from each marketing channel,
- modeling the effects of marketing investments on the turnover,
- analyzing the performance of each media and communication channel,
- identifying the contribution of each channel and optimizing the return on investment.
The end goal is to define the role of marketing, whether it is online or offline, on actual sales, and define for each marketing channel if they are over or under-invested.
The importance of MMM and marketing performance measurement
Since the arrival of the internet and the emergence of digital marketing, advertisers have multiplied the number of communication channels and therefore the number of touchpoints with their audience, prospects and customers.
Therefore, Marketing Mix Modeling becomes very strategic in order to rationalize and compare all these channels to each other. It allows advertisers to respond to current events such as the multiplication of communication channels, but also to everything related to omnichannel with offline and online synergy, to local marketing and especially to local digital marketing, which is in full expansion.
Operationally, Marketing Mix Modeling will allow advertisers to build their strategy by having a better vision of the contribution of each marketing lever and adjusting the budgets from one lever to another.
More globally, a performance modeling tool will allow evaluating the real weight of digital today and its influence on online and in-store sales.
Ultimately, it will also bring transparency to marketing results within companies and will allow advertisers to show the efficiency of digital.
How to do MMM and how does it work?
Data is the engine of an efficient and precise MMM. And when it comes to data, the analysis and the modeling of the media mix performance implies and requires:
- quality data collection and measurement,
- efficient data processing and structuring,
- reconciliation of data from different sources (market, ad-centric, site-centric…).
It also requires a certain maturity regarding digital and the use of data, especially first-party data.
After the collection, processing and reconciliation phase, comes the study phase, with the study and the analysis of the contribution to sales of each lever, which is possible using proprietary solutions or market solutions.
In the end, MMM results will allow marketers to reallocate their marketing budget and observe the impact on sales. However, in order to launch Mix Marketing Modeling analysis or projects, advertisers are most often accompanied by companies that offer MMM services such as marketing research firms (i.e. Nielsen, Gfk, Kantar) or specialized consulting firms (i.e. Converteo, Ekimetrics, Metrics720).
Finally, for an advertiser, being interested in MMM means knowing how to take advantage of first-party data to generate strong business insights, both strategic and operational, which will allow them to better structure and define their media plan.
I would finish by saying it is necessary to innovate, especially with the possibilities offered by digital marketing today, both nationally and locally, and that it is only by innovating and testing new mechanisms that it is possible to prosper and stand out.
Please connect with me if you enjoyed reading this article!
LinkedIn : Alexandre Poulain
About the author: Alexandre Poulain
Currently a Junior Media Consultant at Converteo, a French consulting firm specialized in Data, Media & CRM, and Web Analytics, I am also a Digital Business student at Grenoble Ecole de Management, passionate about tech, internet and luxury businesses.
About this article
This article has been written by a student on the Grenoble Ecole de Management’s Advanced Masters in Digital Strategy Management. As part of a content creation assignment, students are given the task of writing articles based on their digital interests and disseminate the articles online. Articles are marked but we make minimal changes to the content. Thanks for reading! James Barisic, Programme Director, MS DSM.