Why Use Daily Level Data in Marketing Mix Modeling?
November 15, 2023 | Paavo Niskala, Paul Arpikari, Carmen Bozga
Nowadays, understanding the impact of your strategies is crucial for success. Marketing Mix Modeling (MMM) has emerged as a powerful tool for marketers to measure the effectiveness of their marketing activities. However, the granularity at which you model your data can make a significant difference in modeling quality. Here's why you should consider using daily instead of weekly level data in your MMM.
1. Enhanced Data Granularity Leads to Better Results
Modeling at a daily level simply provides more data points. This increases data granularity and make models more complex and slightly more time-consuming to train, but the payoff is substantial. With more data points, these models can capture nuances and trends that would be invisible in weekly or monthly aggregates, leading to more accurate and actionable insights. This enhanced precision is vital when you are making decisions on millions of dollars media spend.
2. Aligning with the Pace of Performance Marketing
Performance marketing operates on a much shorter cycle, often revolving around daily changes and reactions. To truly harness the power of MMM to performance marketing, daily level data is must have. This approach allows marketers to quickly adapt and optimize their strategies, ensuring that they are always in tune with the latest market dynamics and consumer behaviors.
3. Capturing the Nuances of Advertising Effects
Consider the carry-over effect of TV ads. An ad aired on a Monday might have a different impact compared to one aired on a Sunday. Daily data helps in capturing these effects as they should. By understanding how different days of the week influence the effectiveness of your campaigns, you can make more informed decisions about when and where to allocate your advertising budget for maximum impact.
4. Accurately Accounting for Promotions
Promotions, especially those spanning across weeks like extended weekend offers, need precise tracking to gauge their effectiveness. Daily level data allows for a more accurate representation of these promotional periods. This granular data ensures that the start and end of a promotion are accurately captured, providing a clearer picture of its impact on sales and customer engagement.
5. Enabling Daily Refreshes of Data and Results
One of the key advantages of using a SaaS solution for your MMM is the ability to refresh data and results daily. This capability is significantly enhanced with daily level modeling. It allows for real-time insights and the ability to quickly adjust strategies in response to emerging trends or unforeseen market changes. In an environment where agility and responsiveness are key, having daily updates can be a game-changer.
Conclusion: Maximizing Marketing Impact with Daily Level Modeling
Success hinges on the ability to quickly adapt and make informed decisions. Daily level data and modeling in Marketing Mix Modeling (MMM), particularly in a SaaS-based environment, offers an unparalleled advantage. While it introduces complexity and demands more resources initially, the depth of insights and agility it provides is invaluable. This approach aligns perfectly with the fast-paced nature of performance marketing, accurately captures the nuances of advertising effects, and enables real-time decision-making.
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