What Is MMM – Media Mix Modeling?

Media mix modeling (MMM) is an analysis technique used to determine the impact of types of marketing Try on product sales.

In today’s world, the marketing landscape is constantly evolving and businesses are continuously seeking innovative strategies to optimize their advertising efforts. Marketers have access to an enormous volume of data but are still not able to utilize their full potential. They cannot make connections between marketing efforts in different channels leading to the overlooking of essential insights that are crucial for future campaigns.

In this realm emerges the media mix modeling, which is a powerful approach that enables marketers to dissect and understand the various marketing channels in their campaigns. In this article, we will try to understand what is MMM (media mix modeling), its role in shaping business growth, and the significance of a mobile marketing platform within this framework.

1. Conversion data – This measures the effectiveness of different marketing strategies and campaigns in driving results like more app downloads or sales. Getting an insight about the last touchpoint before conversion allows marketers to customize user journeys in a way that they reach the final stage of the funnel at the optimal time for decision-making.
2. Customer data – This monitors the demographic and behavioral information about customers like purchasing habits, income group, and location of residence. Running small-scale, highly personalized campaigns that target customers based on their app activity is far more favorable than blanketing campaigns that are devoid of exclusivity. 
3. Media spend – Measures the total financial investment allocated to different media channels within a marketing strategy. This includes traditional channels like newspapers, and television as well as digital channels like social media ads and search engine advertising.
4. Media exposure – This refers to the reach and frequency within each chosen channel. It considers the customer’s exposure to the ads and assesses the effectiveness of the campaign on consumer behavior.

How Does MMM Marketing Work?

MMM Marketing performs a statistical analysis using a technique called multi-linear regression. Using this, MMM determines the relationship between dependable variables like sales, or app downloads, and independent variables like ad spending across channels or user engagement metrics. There are majorly four major processes in MMM marketing. They are: 

1. Data Collection – The collection of first-party data for a more accurate representation of user reaction and behavior is essential. You must also make sure the data collected has high authenticity.
2. Modeling – MMM works well in the digital realm as compared to the challenging-to-measure traditional methods. The aim is to create a holistic digital funnel that takes the consumer from brand awareness to purchase, and advocacy stages.
3. Data analysis and insights – In this stage, we evaluate the contribution of each channel to the business outcome in line with the dependable metrics that were identified earlier. From here we can measure the media modeling efficiency and ROI for each campaign.
4. Optimization – This is the final phase of MMM Marketing. Here you optimize the data received from the 3rd phase for the marketing mix for future campaigns.

If you want to know whether any particular MMM marketing model is right for your business, there are several factors that you must take into account. Budget, data availability, campaign objectives, skill and expertise, timeframe, and complexity of the mix are some of the factors that should be considered.

Advantages and Disadvantages of Media Mix Modeling (MMM)

There are both pros and cons for MMM. Let us look at each in detail starting with the advantages: 

1. Adds precision of both digital and traditional marketing channels.
2. Assesses online and offline conversion results to capture the relation between variables.
3. Calculates media saturation and yield levels, empowering marketers to identify the most effective investment threshold.
4. Helps in planning and budget formulation, allowing marketers to stimulate and forecast business outcomes.
5. Takes into account the key factors that directly influence the ROI, providing a comprehensive understanding of the driving forces behind marketing success.
6. Maintains a commitment to user privacy by yielding the use of personally identifying information, ensuring individual privacy remains uncompromised.

Let us now delve into some of the disadvantages:

1. Needs a large volume of historical data.
2. Hinges on various assumptions regarding non-marketing factors which introduces a level of complexity in decision making.
3. Delivers reports at infrequent intervals, limiting decision-making and real-time adjustments.
4. Lacks the ability to provide valuable insights into brand perception and the effectiveness of messaging strategies.

In conclusion

MMM is a powerful tool in marketing analytics, offering businesses a comprehensive understanding of their advertising strategies across various channels.

Amidst these channels, we must also not forget the importance of a mobile marketing platform like Trackier, in measuring cross-channel interactions and optimizing strategies based on real-time insights which help businesses to stay ahead of their competition, and tough times.