Part 2: Why to use MMM
What are the use cases and benefits of Marketing Mix Modeling
Why to use MMM
Lesson 2.2 - Benefits of MMM
In this lesson (5:47)
- Allocating marketing budgets with MMM insights
- Getting better alignment with C-suite
- Managing multiple marketing teams effectively
Data-driven budget allocation
The biggest and most prominent difference in moving to MMM relates to marketing investments.
MMM provides Sarah with a new angle on how effectively budgets have been previously driving incremental sales.
This enables her to compare which campaigns are actually driving new sales on top of the baseline, which is how much sales there would’ve been in any case.
Alignment with C-suite
Sarah presents the new plan to the C-suite, which is hesitant at first as the company has always done big campaigns for the three main seasons. They’re also doubtful about any chances, as it has been difficult to pinpoint how individual activities generate results, which makes evaluating the changes hard.
Sarah backs up her new plan with hard numbers on the marketing effectiveness, pointing out that even though the main seasons are important for commercial success, a large part of the campaign sales belongs to the baseline, and that the incremental uplift for the media investments during those seasons isn’t as high as you would imagine.
The C-suite loves the new plan, and not only because it’s driving more sales. As Sarah made the historical performance much more transparent with comparable ROMI metrics and justified the changes to the plan with forecasted business impact for them, it was easier to follow the logic behind the decisions and approve the new plan.
Effective marketing teams management
In the past, Sarah had to work with various reports and metrics from media houses, ad networks and the company’s media agency, which made it difficult to see the big picture let alone manage multiple teams effectively.
Today, Sarah can leverage the holistic and comparable MMM results as the ground truth to guide the discussions and planning.
Like in exchanging and explaining ideas to the C-suite, MMM increases engagement and collaboration between the teams by breaking down silos and ensuring everyone’s on the same page in terms of objectives and results.
Comparable, easily understood metrics make it easy to:
- Discover optimization potential and run experiments on these opportunities
- Prove that you’re doing great things in your marketing to top management and
- Commit different teams to objectives and strategy
Ready for the next lesson?