Part 2: Why to use MMM

What are the use cases of benefits of Marketing Mix Modeling

Why to use MMM

Lesson 2.1 - Use cases of MMM

  • In this lesson (6:34)

    • Using MMM to get the big picture in marketing effectiveness
    • Recognizing bigger trends
    • Allocating the budget based on MMM results

Get the Big Picture

Today, marketers have to manage a plethora of different channels and campaigns, which tend to overlap each other. At the same time marketing data is becoming more and more fragmented, which means the scope of the results and reports the marketers get is typically quite narrow.

Granular insights are basically good IF they are accompanied by comparable metrics so that you can compare if an ROI of 3 is good, average or below average.

As MMM collects and models all marketing and business data in one place, it provides the ability to take a step back and look at where the money is going, what is it doing there, and how these results compare against each other.

MMM in a nutshell

Defining bigger trends with MMM

Looking at things on a broader scope over a longer time span unlocks another use case: In addition to knowing what happened, you start to also understand why something is happening.

Let’s say that a report from your previous marketing campaign tells you the ROMI for Channel 1 was 3 and the ROMI for Facebook was 5.

Both are decent numbers, but your boss wants to increase the marketing-driven business impact for the next quarter. Should you:

  • Pull investments from Channel 1 to Facebook
  • Pull investments from Facebook to Channel 1
  • Keep everything as is
  • It depends

(Answer coming up later on in this lesson)

Optimising marketing effectiveness

Making data-driven decisions in marketing

The third and probably the most important use case of MMM is to understand where the effectiveness is going to be tomorrow.

Coming back to our previous example and our answer to the question, we’re going to interpret the current situation and predict what the marketing effectiveness will be tomorrow.

The MMM results build a case for pulling investments from Facebook to Channel 1 for three reasons, even though the ROMI was better for Facebook than it is for Channel 1:

  • We know that increasing investments in Facebook decreases its ROMI
  • We interpret that Channel 1 has an indirect effect on baseline growth
  • We extrapolate that the ROMI for Channel 1 will keep on growing over time

And so our answer would be B.

Finding the right answers with MMM

Ready for the next lesson?

Lesson 2.2