What is the difference? Marketing Mix Modeling vs Media Mix Modeling

Considering how important marketing measurement is nowadays, we believe you must have definitely heard of either Marketing Mix Modeling or Media Mix Modeling, which play a crucial role in strategic marketing planning. They are great for organizations looking to optimize their advertising spend and overall marketing strategies.

However, often there is confusion between the two because they both use the same acronym "MMM" and have similar methodological frameworks. In this blog post, we want to clear this confusion and give you an overview of the differences between the two, because the scope and application of each model are actually very different.

So what is the difference? In short, Marketing Mix Modeling gives you a full picture by covering the 4 P's of marketing—Product, Price, Place, and Promotion. This helps you see and understand how all parts of your marketing work together. On the other hand, Media Mix Modeling usually only looks at how your money spent on ads affects your sales results. Therefore, it often misses out on other key parts like discounts, product (category) specific information and sales channels.

It's important to understand how different these models are and how they can work together. When you use all 4 P's in your planning, you can make smarter choices, use your marketing budget better, and get more back from your investment. Let’s discuss this in more detail in the following sections.

What are the shortcomings of Media Mix Modeling?

Media Mix Modeling overlooks three critical aspects: 'Price', how the discount and promotions affect sales, the 'Place' (where products are sold, also known as sales channels) and the 'Product' (the variations and types of products offered) all have an affect how marketing is performing and products are sold.

For example, the effectiveness of promotions can vary greatly depending on the pricing of products—like a $5 t-shirt versus a $500 luxury item. Additionally, the channel through which these items are sold significantly influences their sales performance. Promotions for inexpensive items might generate huge sales volumes in big-box retailers or discount online marketplaces, whereas expensive, high-end products could see better results in boutique shops or specialized luxury e-commerce platforms. The place and product specifics fundamentally alter how promotions should be strategized and evaluated. Let’s delve into these topics separately.

Price

In the context of Marketing Mix Modeling, the Price focuses on how discounts and promotions impact sales performance. This also includes looking at the variability in promotion effectiveness across different pricing levels. For example, a small discount on a high-end product might not have a significant sales boost , whereas the same percentage off a lower-priced item could dramatically increase the turnover. Having an in-depth analysis of the Price can help businesses understand the optimal pricing strategies and promotion tactics for various product types and consumer segments. Therefore, using the data on how price reductions influence consumer behavior and sales volume can help companies fine-tune their promotional offerings to maximize ROI and align them with the overall marketing strategy. Simply put, knowing the impact of discounts and promotions can make or break a marketing strategy. Sellforte MMM takes into account both discounts and promotions in the analysis. You can find out more about it here.

Place

Place is essentially the place where the products are sold also known as sales channels. These can range from e-commerce platforms to physical retail locations, and marketplaces like Amazon. Each channel offers distinct advantages and challenges, and also different influences on consumer purchasing behavior. For example, online marketplaces might bring rapid turnover of lower-priced items through convenience and broad reach, while brick-and-mortar stores could provide a better venue for selling high-value items that benefit from hands-on customer experience. Understanding the effectiveness of sales channels can help companies strategically place their products in environments that maximize exposure and sales. This leads to a more nuanced and effective distribution strategy.

Product

Product essentially means analyzing the different categories and ranges of products a company offers. This also includes understanding how specific product types or changes in the product assortment can affect sales. For example, introducing a new product line might attract a different customer segment, or discontinuing an underperforming product might save costs and streamline operations. If businesses understand how each product category performs across different sales channels and promotional activities, then they can make informed decisions about product development, marketing focus, and inventory management. Therefore, having a strategic product oversight is crucial for optimizing sales.

The impact of Price, Place and Product

Ignoring these key elements—price, place and product—can lead to an incomplete understanding of a your modeling exercise and paint a wrong picture of marketing performance. For example, if a marketing strategy is planned without considering the sales channels, the business might falsely attribute the success of a promotion solely to the appeal of the advertisement itself, when in fact, the choice of selling venue played a crucial role. Misinterpreting this data can result in lost opportunities for optimization. Marketers might continue to invest heavily in certain media channels without realizing that diversifying sales channels or tweaking product offerings could yield better returns. Moreover, neglecting to analyze the impact of different product types and sales locations can lead to inefficient budget allocation, reducing the overall effectiveness of marketing efforts and potentially leaving significant revenue on the table. Ultimately, we believe that integrating Price, Place and Product data sets in your marketing measurement is essential for a more accurate and effective marketing strategy.

Conclusion

To wrap it up, the big difference between full-spectrum Marketing Mix Modeling and the narrower Media Mix Modeling is about focusing on details. For businesses, especially if you're a retailer or sell directly to consumers, it is crucial to use the full-view Marketing Mix Modeling to make sure you take into account all growth drivers. If you can look at all the parts of your marketing strategy, then, you can tweak your strategies to match better what your customers need, stay on top of market changes, and make the most out of your investment.

Pulling off a successful full-spectrum Marketing Mix Modeling project depends on getting strong support from your management team and having the right resources. You need to make a solid case for why this approach is worth it, showing how it can bring better results and help you stay ahead. Get your management on board early by clearly explaining the benefits of a thorough marketing analysis. This support is key to making sure your Marketing Mix Modeling efforts take off and bring long-term wins. You check check out our guide on how to build a successful Marketing Mix Modeling business case here .

Curious to learn more? Book a demo.