Marketing strategies have become increasingly complex in today’s multifaceted, data-driven ecosystem. With so many marketing channels and platforms to keep up with, businesses are constantly seeking ways to optimize their campaigns for maximum impact, while keeping their budgets on track. This quest for increasing effectiveness and efficiency has led to higher demand for Marketing Mix Modeling (MMM), a sophisticated analytical tool that can help organizations allocate budgets and plan their next moves as strategically as possible.
In a recent LinkedIn “Ask the Experts” Q&A session with E29 Marketing’s data analytics consultant, Michael Bagalman, we recently shed light on the ins and outs of Marketing Mix Modeling. Check out the livestream replay below and read on for more on this exciting analytical frontier.
MMMs are Big Endeavors that Inform BIGGER Decisions
On a basic level, Marketing Mix Modeling (MMM) refers to a robust analytical strategy that empowers businesses to understand the impact of their marketing activities on sales and revenue using historical data to identify the most effective marketing channels and optimize marketing spend. Bagalman says it is “one of the most advanced [and] powerful tools that we have available to us in the overlapping world of marketing analytics and data science,” and that certainly isn’t an exaggeration.
Because MMM dives deep into a holistic analysis of various marketing elements, such as advertising, promotions, pricing, and distribution, with historical data and advanced statistical modeling, it sheds light on the effectiveness of each marketing channel, as well as how each marketing “lever” works as part of an entire strategy. MMMs provide businesses with valuable insights that go beyond simple metrics, informing big decisions that shape the future of marketing strategies.
With so much hinging on MMMs, it is understandable to feel a little overwhelmed by the prospect of taking on such a big project. Fortunately, there are resources out there that can help you understand more about the process of creating an MMM, what the cost is, and how partnering with an expert resource, like E29 Marketing can help. Check out this short video clip where Michael Bagalman and Amie Stanley discuss the cost of MMM, when and why to use an expert agency to build your MMM and how to achieve the most efficiencies.
MMMs: Data you (and your budget) can really use
One of the most important aspects of MMMs, according to Bagalman, is being able to see what effect different parts of your marketing strategy have on your overall budget. “The main thing that you’re going to get out of marketing mix modeling is an understanding by marketing tactic, by channel, or even tactic what your ROI was,” Bagalman says, adding that you can use models to see “how that tactic performed, [while also] taking into account everything that was going on at the same time.”
Taking this a step further, MMMs can also help marketers use data from the past to plan for the future. “One of my favorite parts is that allocation helps clients determine budgets,” says E29 Marketing founder Amie Stanley, adding that if organizations “need to get x amount of sales,” they can use their MMM to find “what the budget is they need to get there [to be] able to do that.”
For more on the practical types of data that MMMs can provide, check out the short video clip below:
Common pitfalls of MMMs
One of the biggest pitfalls when it comes to using MMMs is data integrity. “If you put in the wrong data or you are missing something, that can have a significant effect on your results,” Bagalman says. Accuracy in data input is paramount; any errors or omissions can skew the model’s analysis, leading to misguided conclusions.
Another pitfall lies in the challenges associated with data gathering. Bagalman has said that he has seen some organizations “face some roadblocks internally with actually getting access to things that would make the model work,” adding that “some of your partners don’t feel like [they are] going to benefit from this enough and they don’t want to go to the trouble.”
Though these issues can be complex to take on, with the right partner they can be avoided. Check out Bagalman’s advice for those looking to avoid these pitfalls here:
Ready to get started with an MMM or want to learn more? Bagalman says don’t waste time, and get with a marketing specialist as soon as you can to discuss possibilities. “Talk with the experts that you have access to,” he says, adding “If you are working with E29 call Amy or call Shantelle or whomever you work with and say ‘Hey I’d like to have a conversation about whether marketing mix modeling is going to be helpful for me’.”
If you’re ready to learn more about how an MMM can help your organization, contact us today!