How can marketing agencies use MMM platform for media planning? Part 1
October 25, 2023 | Paul Arpikari, Carmen Bozga, Eeva Karhu, Mari Leväjärvi, Harri Junttari
In the first part of our series on Agency Marketing Mix Modeling (MMM), we'll explore how MMM platforms can be a game-changer for marketing agencies, enabling them to offer an additional dimension to their portfolio and provide clients with a deeper understanding of how marketing impacts sales, ultimately setting them apart in the competitive world of marketing services.
MMM is not just a tool for historical analysis; it's a forward-looking and action-oriented resource. MMM captains the data to help agencies plan effectively for the future. By providing actionable insights, it empowers agencies to make informed decisions, allocate resources strategically, and optimize their marketing strategies for maximum impact. It's a tool that doesn't just dwell on the past but actively shapes the path forward in the ever-evolving world of marketing.
The Essence of Media Planning
Media planning is the compass that guides advertisers to determine the most effective ad placement, timing, and approach, ensuring that each advertising dollar counts. It's a nuanced process tailored to meet the unique needs of each client, reflecting the agency's commitment to delivering results. Let us check out a few services that most marketing agencies offer as part of their portfolio:
Marketing Agency Services
As part of media planning, agencies extend a comprehensive service portfolio to cater to diverse marketing needs that their customers have. This repertoire includes for example following services:
- Marketing Strategy
- Search Engine Optimization (SEO),
- Public Relations (PR)
- Content Marketing
- Market Research
- Video Production
- Web Design & Development
This comprehensive suite of services forms the bedrock of media planning, offering clients a robust toolkit to achieve their marketing goals effectively, but it’s missing a critical part of where all that hard work is connected to real business results.
What really sets MMM apart from other measurement types, is its ability to bridge the gap between marketing and sales, speaking the language of ROI and investment rather than viewing marketing as a disposable cost.
The Transformation of MMM
Traditionally, MMM was a lengthy, costly, and exclusive process primarily conducted through consultancies.
In the old days, embarking on a MMM journey meant committing to a lengthy process that could take months or years. The complexity of data collection, analysis, and the intricate methodologies involved made it a resource-intensive endeavor. The costs associated with consulting firms, data acquisition, and the specialized expertise required often placed it out of reach for many businesses.
Due to its high cost and lengthy timeline, traditional MMM was predominantly associated with larger corporations with substantial marketing budgets. It was perceived as a luxury product reserved for industry giants, leaving small and medium-sized enterprises (SMEs) at a disadvantage when it came to leveraging data-driven insights for marketing optimization.
The Modern MMM Paradigm
In the modern era, the landscape of MMM has undergone a profound transformation. The advent of SaaS solutions has democratized MMM, dismantling the barriers that once restricted its accessibility.
SaaS-based MMM platforms have revolutionized the speed at which insights can be obtained. With streamlined processes, advanced algorithms, and user-friendly interfaces, businesses can now access set it up fast and get instantaneous results as daily updated MMM results. This agility empowers marketers to make informed decisions swiftly, keeping pace with the dynamic nature of the market.
Perhaps the most significant shift is in the cost structure. MMM is no longer a luxury product; it's an affordable, subscription-based service. Businesses of all sizes can subscribe to MMM platforms, paying a fraction of the cost associated with traditional consultancy-driven MMM. This newfound affordability levels the playing field, enabling SMEs to harness the power of data-driven marketing optimization.
Aligning Media Planning and MMM
To navigate the complex landscape of modern marketing effectively, it's crucial that both media planning and MMM share a unified vision. This starts with setting joint goals that resonate with the overarching objectives of the organization. By aligning these two critical facets, agencies can ensure that their campaigns are not just well-planned but also well-equipped to hit campaign business goals precisely.
The synergy between media planning and MMM amplifies the impact of marketing efforts. MMM evaluates historical data and provides insights into the effectiveness of different media channels. This information is invaluable in guiding media planning decisions. It helps in allocating budgets to channels that have proven to deliver results, ensuring that every advertising dollar is strategically invested.
Marketing is a dynamic field, and what works today may not work tomorrow. This is where the concept of continuous improvement comes into play. Agencies need to adopt an iterative approach to media planning such as MMM. Regularly reviewing campaign performance, analyzing MMM insights, and making necessary adjustments are key components of this process.
Continuous improvement relies on data-driven decision-making. MMM provides agencies with a streamlined data analysis process, enabling them to identify trends, patterns, and opportunities for enhancement. This information informs media planning decisions, allowing agencies to adapt and refine their strategies to stay ahead in a rapidly changing market.
Efficiency of Media Spend
MMM can reveal the efficiency of media purchases by analyzing the relationship between spending and Return on Investment (ROI). MMM provides a data-driven perspective on how effectively marketing budgets are being allocated across various media channels and campaigns. It helps agencies and clients understand which media purchases are delivering the best results and which may need adjustment. This efficiency insight allows for more informed budget allocation decisions, ultimately maximizing the impact of every advertising dollar spent.
New Media Adoption
MMM can be a valuable tool for assessing the performance of new media adoption and incorporating emerging technologies or advertising channels into marketing strategies. For example, consider the evaluation of TikTok as a channel for reaching a younger audience.
Following the TikTok example, MMM helps answer important questions such as:
- Effectiveness: Is TikTok reaching and engaging the desired younger audience effectively? MMM can quantify the impact and ROI associated with TikTok campaigns.
- Integration: How does TikTok fit into the overall media mix? MMM can reveal whether TikTok complements or competes with other channels and provide recommendations for optimizing its integration.
- Optimization: Are there opportunities to fine-tune TikTok campaigns for better results? MMM can pinpoint areas for improvement and guide adjustments to maximize performance.
Aligning KPIs for Client Success
In the dynamic world of marketing agencies, there's a unique interplay of objectives between agencies and their clients. While they often have different Key Performance Indicators (KPIs), both share a common goal—the achievement of outstanding results.
Understanding the client's marketing KPIs is akin to speaking the same language. It bridges the gap between the agency's expertise and the client's specific goals. It's not merely about delivering a service; it's about delivering measurable success. KPIs act as guiding stars, helping agencies fine-tune their marketing strategies. By knowing precisely what metrics matter most to the client, agencies can tailor their approach, channeling efforts toward achieving these specific objectives. A successful agency-client relationship hinges on effective communication. Agencies must develop a robust reporting strategy to convey the insights gleaned from KPI tracking. Reports should be concise, easy to understand, and customized to meet the client's unique needs.
MMM, such as Sellforte's Marketing Dashboard, offers a comprehensive solution for tracking KPIs. It consolidates various KPIs, including campaign/media ROI, Customer Acquisition Cost (CAC), Customer Lifetime Value (LTV), and various engagement metrics, into one accessible platform.
Incorporating MMM into the agency's toolkit enhances KPI tracking capabilities, ensuring a holistic view of marketing performance. It equips agencies with the insights needed to make informed decisions and drive measurable results.
Transparency is a shining feature of MMM, as it illuminates the performance of marketing activities. This transparency is not just beneficial for clients but also for the agencies themselves. For Chief Marketing Officers (CMOs), who are tasked with demonstrating the value of marketing investments, MMM becomes an invaluable tool. It seamlessly links marketing investments to business KPIs, offering clear insights into what's working, what's not, and the valuable lessons learned along the way. In a landscape where transparency is paramount, MMM stands as a beacon, ensuring that the impact of marketing efforts is not lost in the process but rather becomes a driving force for informed decision-making and strategic planning. In the chapters ahead, we'll delve deeper into how MMM empowers agencies to optimize their strategies and drive success in the ever-evolving landscape of marketing.
Optimization for Bigger Media Budgets and New Splits
As businesses evolve, so do their marketing needs. Scenario planning is a proactive approach to anticipate changes in budget allocation and media channel splits. By considering different scenarios, such as increased budgets or new market segments, agencies can adapt their media planning strategies accordingly. Scenario planning equips agencies with the agility to respond swiftly to changes in the market landscape. It ensures that media planning remains dynamic and flexible, enabling agencies to seize emerging opportunities or address unforeseen challenges effectively.
Scenario planning is actually part of the Sellforte product and we call it Media Optimizer. At its core, media optimization is about ensuring every dollar spent on advertising achieves the maximum possible impact. MMM inherently evaluates the performance of various media channels and campaigns based on historical data. This evaluation presents insights into the effectiveness of each channel in driving desired outcomes, whether it’s sales, conversion, or any other business KPI. Armed with this information, agencies can reallocate their budgets in a manner that accentuates the strengths and counters the weaknesses of their previous marketing strategies. This strategy works both for long-term and short-term planning. We will discuss this in detail in Part 2 of this series.
Conclusion and Key takeaways
In the first part of this series, we've explored how Marketing Mix Modeling (MMM) is transforming the way agencies approach marketing strategies. It's not just a tool; it's a game-changer that empowers agencies to make smarter decisions and deliver tangible results for their clients.
Here are some key takeaways from our journey so far:
We invite you to explore Part 2 , where we'll focus on media optimization and scenario planning for agencies. It's a journey of discovery that promises to open up new horizons in the ever-evolving landscape of marketing. Stay tuned for more insights and strategies to empower your agency and elevate your client's success.
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