What is the Value of Marketing Mix Modeling to Planning? Part 3: Continuous Tactical Optimization

March 05, 2024 | Eeva Karhu, Carmen Bozga

What is the Value of Marketing Mix Modeling to Planning? Part 3: Continuous Tactical Optimization

Welcome to our third and last part of this blog series. In our final piece of the puzzle, we're diving into continuous tactical optimization using Marketing Mix Modeling (MMM). In our previous two parts we talked about the ins and outs of annual and campaign level marketing budget optimization. Please check out Part 1 and Part 2.

Sellforte is here to guide you through your marketing budget planning and make sure you're on the right track with your marketing budget allocation. It helps you figure out how much to spend on your marketing throughout the year. Starting with a clear budget plan, Sellforte allows you to adjust your spending as things change—because they always do. This is what we call continuous tactical optimization with MMM. This way, you're not stuck to just one plan. Instead, you have the flexibility to tweak your spending based on the performance of your marketing efforts and what the latest data tells you. It's all about ensuring your marketing efforts are effective, can quickly adapt to new trends, and truly make a difference, while recognizing that adjustments are a part of the process.

What is continuous tactical budget optimization with MMM?

Before talking about continuous tactical budget optimization, let’s discuss continuous MMM. Traditional MMM projects, often a one-time deal with consultancies, analyze a portion of your historical data during a set timeframe. At first, the idea of gathering insights for future campaigns seems pretty useful. However, when you consider the needs of today's omnichannel retailers, it's essential to think about this information both in terms of efficiency and time. One-time projects can provide valuable marketing insights, but the process can be time-consuming. By the time these findings are ready to be implemented into your current strategy, there's a risk they may not be as relevant or fresh due to the fast-paced nature of the retail environment.

On the other hand, continuous MMM offers a more dynamic approach because it provides ongoing analysis and insights that can be immediately applied to your marketing strategies, making sure that decisions are based on the most current data. This setup means you're not just glancing in the rearview mirror; you're getting a live feed of the road ahead, allowing you to make real-time adjustments to your marketing strategy.

Now, why does this matter? As we've explored in the first two parts of this series, planning your marketing budget isn't just about spreading the cash across a calendar and hoping for the best. With continuous MMM, you're essentially given a glimpse into the future. It enables you to forecast the impact of your marketing decisions making sure that you have access to the right strategies to either reach your sales targets or get the best ROI out of your budget. The best part of continuous MMM lies in its ability to not just retrospectively analyze but to proactively guide marketing decisions.

So, what is continuous tactical budget optimization with MMM? Well, it’s essentially what we discussed in the previous two paragraphs. Continuous tactical budget optimization with MMM boils down to leveraging your ongoing MMM solution to make sharp, real-time decisions that ensure your marketing budget is always working in your best interest. It's about using the power of continuous data analysis to adjust your sails as the market winds change, ensuring you're not just spending money, but investing it wisely. This way you can keep your marketing strategy agile, responsive, and, most importantly, aligned with your business goals.

What can continuous MMM do?

Picture this: you're halfway through the month, and your sales figures are trailing 10% behind the target. Right now every decision counts. This is where MMM comes into play. MMM analyses your current data and it helps you create a comprehensive strategy for you. It precisely calculates the additional budget required to bridge the 10% sales gap within the forthcoming two weeks, and crucially, it guides on the optimal allocation of this budget for the best outcome. Therefore, MMM ensures that each added dollar is an investment towards achieving your sales targets.

Also, continuous MMM plays a critical role in optimizing budget across your various campaigns. You can reallocate funds from one campaign to another based on performance, thus making sure that the marketing budget is always channelled towards the most effective areas of your marketing strategy. This way you can stop underperforming campaigns before they harm your overall strategy. Through constantly monitoring campaign effectiveness, continuous MMM, assures you that marketing strategies remain fluid and adaptable, maximizing return on investment and driving towards successful outcomes.

Why is continuous MMM important for marketing agencies?

Incorporating continuous MMM into their offerings could be a strategic move for marketing agencies. MMM enhances the value they offer to clients because it grounds their marketing strategies in solid, tangible data. With ongoing MMM agencies can offer data-backed decisions that show a clear pathway to ROI. Essentially, continuous MMM equips agencies with the tools to not only meet but exceed client expectations, fostering stronger relationships and driving business growth. Another advantage that MMM can give to agencies is helping them optimize even on their bidding strategy level enabling agencies analyze media performance with latest buying methods.

What is bidding strategy level optimization with MMM? Bidding strategy level optimization refers to the process of fine-tuning your bid amounts in advertising campaigns to maximize performance based on specific objectives. In the context of digital marketing, particularly with platforms like Google Ads or Facebook Ads, the MMM bidding optimization involves adjusting how much you're willing to pay for each click (CPC), impression (CPM), or conversion (CPA), depending on the goal of your campaign. When you integrate continuous MMM into your planning processes, you can dynamically adjust bids based on comprehensive insights from across all marketing channels. As a result, you're able to allocate your budget more efficiently, targeting the right channels at the right times to maximize ROI and increase campaign performance.

Conclusion and key takeaways

In conclusion, continuous tactical budget optimization with Marketing Mix Modeling (MMM) is a transformative approach for businesses and marketing agencies alike who are interested in including both strategic and tactical marketing investment optimization into their toolbox and ensure their ability and agility to react when needed. Continuous measurement secures continuous improvement and provides always available data for performance analysis and for future investment optimization.

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Agency Marketing Mix Modeling

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