In today’s digital age, marketing has become more important than ever. With a focus on data and analytics, marketers and advertisers realize what customers really care about and Why. And yet, with so much data, many organizations still struggle to convert that data into actionable information. There are some solutions that can be implemented to take the guesswork out of marketing to make better data-driven decisions.
This is where Marketing Mix Modeling (MMM) comes in. Although every business is different, MMM is a tool which considers both controllable and uncontrollable variables to determine the best route for marketing budgets to maximize sales.
Marketing mix modeling can help solve some of the challenges that marketers face every day, such as:
- Determination of marketing effectiveness and return on investment (ROI)
- Establish effective information on future trends and variables
- Manage and allocate an efficient budget
- Manage data quality from various channels, sources and systems
Many Fortune 500 companies use marketing mix modeling solutions, such as P&G, AT&T, Kraft, Coca-Cola and Pepsi. Yet even the smallest organizations have the opportunity to identify potential new areas for investment or even cut the budget in certain areas to maximize their marketing efforts. Here are three benefits of marketing mix modeling.
Marketers should recognize the benefits of marketing mix modeling that also provides unspoken insight. These model solutions provide a detailed assessment of marketing efforts.
This means that organizations are able to identify the main drivers of volume, campaign effectiveness and return on investment. It’s no secret that marketing is all about making sure these factors are identified and addressed.
With a clear assessment of current marketing efforts, organizations can then make better data-driven decisions that can have a huge impact on future campaigns and budgets.
When considering the benefits of marketing mix modeling, predictive analytics is particularly helpful.
In today’s market, marketing mix modeling is coupled with other tools, such as artificial intelligence (AI) and machine learning (ML). This marketing strategy offers a broader view of the future of an organization’s marketing efforts.
Remember that MMM takes into account many different variables. For example, variables such as industry trends, seasonality and the impact of advertising are taken into account.
Being able to predict the effectiveness of campaigns in the future based on MMM variables gives marketers a clearer view of what to anticipate and consider. Marketers can anticipate customers’ needs and desires to deliver more personalized campaigns.
Most organizations have a budget in mind for their marketing and advertising (or should!) And as every marketer knows, it’s important to know how much is being spent on which campaign.
For example, if paid digital ads like Google Ads drive more conversions than TV ads, the budget needs to be reallocated to focus more on what drives more conversions.
One of the main benefits of marketing mix modeling is the ability to visualize budgets more effectively. With variables like past expenses and business performance, you can see what worked and what didn’t. As mentioned above, marketing teams can use Marketing Mix Modeling to reduce budget spend that isn’t working to move it to another campaign.
It is important to understand that the quality of the data collected has a huge impact on marketing efforts. For example, good quality data decreases risk and can lead to better decision making for budget spending.
Data quality also has an impact on data analysis solutions. One of the main benefits of marketing mix modeling is the prediction of future marketing results. Yet if the data used in the model is not collected and analyzed properly, the model will not be as efficient.
With so many variables taken into account when building the model, it is essential to ensure that the quality of the data is acceptable before embarking on any marketing mix modeling solutions.
Every organization is different. However, it is undeniable that the benefits of marketing mix modeling can be used for any organization. Essentially, MMM has three main benefits that can improve marketing effectiveness.
First, marketing mix modeling gives marketers a 360 ° view of their current marketing efforts. Even industry veterans may find evaluating their efforts essential.
Then, artificial intelligence and machine learning are becoming increasingly important in MMM’s efforts for predictive analytics. Improving future marketing strategies allows organizations to prepare for several variables and approach them with a plan in advance. This way, marketers are able to deliver the most optimal campaigns to customers, regardless of the variable.
And finally, businesses can use the benefits of marketing mix modeling to optimize marketing spend allocation. Budget cuts can prove to be quite a challenge, especially with a limited amount or a lack of quality conversions. MMM provides this top-down view of where the money is actually spent, but also the results of that spending.
In addition, MMM is constantly improving. With the quality of data analytics solutions and cloud-based migrations, data has become essential for organizations. With better data quality, marketing mix modeling also improves. Additionally, the continued growth and use of AI and ML over the years has resulted in lower costs, and MMM is now easier than ever to implement.
Optimize your path with the best marketing mix. At Pandera, we specialize in delivering data-driven solutions that help modernize and transform the way our customers activate their data.
If your organization is interested in other benefits of Marketing Mix Modeling and what Pandera can do for your business, please get in touch with us!