Marketing mix modeling (MMM)
Marketing mix modeling (MMM) is a statistical analysis technique that uses sales and marketing data to measure the impact of marketing activities on sales. It's a data-driven tool that helps marketers:
- Improve media performance - MMM can help marketers understand the impact of their marketing and brand investments.
- Optimize future marketing plans - MMM can help marketers predict the impact of future marketing efforts and adjust spending on in-flight campaigns.
- Maximize ROI - MMM can help marketers optimize advertising mix and promotional tactics to maximize their return on investment.
MMM uses statistical models, such as multivariate regressions, to analyze sales and marketing time-series data. It can also include multi-level analysis to provide a more comprehensive view of how marketing activities influence outcomes.
When selecting a modeling technique for MMM, you can consider things like:
- Data complexity: Whether the data is simple or complex, and whether it has non-linear patterns
- Model interpretability: How easy it is to understand the model and its drivers
- Data availability: Whether the data required for the technique is available
- Resource constraints: Whether you have the computing power and expertise to implement and maintain the model
- Business objectives: Whether the technique aligns with your business objectives