How marketing agency can use MMM platform for media planning? Part 2: Media optimization
October 31, 2023 | Paul Arpikari, Carmen Bozga, Eeva Karhu, Mari Leväjärvi, Harri Junttari
Welcome back to the second part of our blog series on Marketing Mix Modeling (MMM) and its transformative impact on marketing agencies. In Part 1 , we explored the foundational principles of MMM and how agencies can align with client goals, refine strategies, and harness the insights derived from MMM.
In the second part of our blog post series, we turn our attention to the heart of MMM: Media Optimization. Here, we'll delve into how MMM inherently evaluates the performance of different media channels and campaigns using historical data. Through this evaluation, we gain valuable insights into the effectiveness of each channel in achieving desired outcomes, whether it's boosting sales or meeting other key performance indicators (KPIs). Armed with this knowledge, marketing agencies can strategically reallocate their budgets, capitalizing on the strengths and addressing the weaknesses of their past marketing endeavors.
Media Optimization with MMM
Media optimization is about making every advertising dollar count. It's the art and science of ensuring that each dollar spent on advertising delivers the maximum possible impact. With the advent of modern MMM, tools like Sellforte's "Media Optimizer" have transformed this process from lengthy and costly endeavors of the past to an instantaneous and cost-effective approach.
The Media Optimizer simplifies and accelerates the budget optimization and reallocation process. In essence, it takes your marketing data, including running campaigns and various media channels, and calculates the optimal budget split to either achieve the highest Return on Investment (ROI) or meet specific sales targets.
It's important to note that while the Media Optimizer enhances media allocations, it doesn't replace the in-depth studies that agencies undertake. Many times, the goal isn't just to maximize ROI; it's about reaching saturation and frequency within a specific target group. Media planners work with a variety of metrics, and the Media Optimizer is a valuable addition for campaigns where sales are a KPI. It shines when working directly with a client, allowing agencies to test various scenarios they are planning.
However, the true potential of the Media Optimizer lies in its ability to take agency services to the next level. It empowers clients to understand marketing performance in hard numbers backed by data.
Short- and Long-term Media Planning
Short-Term Weekly Level Planning
In the fast-paced world of media, conditions can change rapidly. The Media Optimizer is tailored for agility:
- Weekly Performance Evaluation: Review the performance of different media channels like Google and campaigns on a week-to-week basis. Identify what's driving success and areas needing immediate attention.
- Prompt Budget Adjustments: Based on the weekly insights, quickly shift budgets between different channels or campaigns to harness emerging opportunities or counteract sudden challenges.
- Testing New Mediums: Get accurate and fast feedback if you are testing new channels like TikTok, Meta Advantage+, YouTube or other video formats that are typically not captured in Click-based attribution tools
Long-Term Planning (Quarterly or Yearly)
Long-term planning is about vision and strategy. Estimating the performance of products is essential for optimizing strategies and maximizing revenue. By evaluating which products consistently outperform others in revenue generation, agencies can identify potential focal points for their marketing and sales campaigns. It's also crucial to assess activities that may no longer yield desired results, streamlining processes for efficiency and cost-effectiveness.
- Forecasting: Utilize historical data to forecast potential performance for upcoming quarters or the entire year.
- Strategic Budget Allocation: Plan yearly or quarterly budgets, allocating enough to promising campaigns and setting aside funds for experimentation.
- Benchmarking: Set performance benchmarks for upcoming periods, providing clear goals and KPIs.
Overall, MMM provides transparency for both short and long-term planning, offering an efficient way for all stakeholders to assess performance. It helps identify what strategies are effective, whether targets are being met, and what adjustments are needed to achieve goals. This data-driven approach ensures that marketing efforts remain aligned with objectives and adaptable to evolving needs.
Every marketing dollar counts and MMM can help agencies evaluate whether their client's budget aligns with the objective of reaching sales or marketing targets. It provides a clear perspective on the likelihood of achieving these targets, ensuring that the allocation is both strategic and poised for success.
Additional key features of MMM for Agencies include:
- ROI Analysis: Understand which campaigns or channels provide the best returns and channel your funds there.
- Cost Efficiency: Identify channels or campaigns with lower acquisition or impression costs, allowing for greater budget allocation.
- Scenario Analysis: Explore different budgeting scenarios to understand potential outcomes and select the one that aligns best with your objectives and constraints.
As marketing agencies continue to navigate the dynamic marketing landscape, the integration of MMM Media Optimization stands as a powerful tool that empowers them to refine strategies, deliver measurable results, and, ultimately, drive unparalleled success for their clients. In the next part of our blog post series on how marketing agencies can use MMM as part of their service portfolio, we will talk about the MMM dashboard, specifically the Sellforte time series.
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