Marketing mix modelling is currently enjoying a bit of a resurgence after being (unfairly) overshadowed by digital attribution and “AI-driven” alternatives. I’m measuring that only by the current level of demand for my services.
It’s not just happening to me. Other freelancers and agencies large and small who offer MMM are experiencing the same. Why and why now? If you want to know more about what marketing mix modelling is, then have a look at these:
Here are the three broad reasons as I see them. Notice how they are all umbrellas under which various different triggers are hidden.
It was not so much the pandemic itself (for most businesses) but the upheaval that came along due to government intervention into private lives and commerce. The impacts were unexpected then unpredictable. Two enemies of a thriving business.
Demand for products in some sectors skyrocketed above what supply chains could fulfil, in others it nosedived when certain industries effectively shut down. Knowing in either case whether you can market your way back to normality is useful.
Uncertainty tends to mess with marketing budgets, so the clients who cut budgets wanted to know if they’d done the right thing. Others who had enjoyed higher demand wanted to know how much of that was due to covid vs. their marketing.
Clients who had pivoted into new revenue streams either by necessity or by seizing an opportunity found themselves with a new business arm to evaluate. And others spent budget in new marketing channels that were previously out of reach to them.
In summary the uncertainty created by covid resulted in a lot of businesses reviewing how they monitor performance and evaluate marketing activities. Marketing mix modelling is the single stone that, if done right, kills both birds.
Some other techniques that attribute monetary value to digital marketing performance rely on cookie tracking to monitor what an individual is doing online. Cookies allow a prospective customer’s journey to be mapped.
With enough data it’s possible to understand the relative values of different types of digital marketing to a business. And to find those people again if you want to send them more messages. Cookies were easy to measure, so businesses did, in droves.
Pressure has come from opposite ends of the field. Although it’s been delayed Google are blocking third party cookies on its browsers from 2023. And consumers are increasingly knowledgeable about being tracked and how to avoid it.
Marketing mix modelling does not rely on cookies. Some businesses have realised that it’s worth sacrificing some minutiae about how digital channels work to be able to be measure robustly at all. Especially if recent questions are on fundamentals.
And, as has always been the case, MMM measures marketing performance in the context of all other sales driving activities, online and offline, marketing or otherwise. Older but maybe wiser. Slower but more comprehensive. Reassuringly expensive.
Marketing mix models and digital attribution are not truly substitutes. In marketing effectiveness heaven all businesses have both - and more research besides. Back in the real world of finite budgets and limited resources it is though often a choice.
Some businesses with huge marketing effectiveness programs pressed pause in 2020. I don’t blame them. Marketing budgets were slashed as sectors shut down. No point in paying what can be a small fortune to precisely measure not much.
These big projects work so well for decision-making because the measures are uniform across brands and countries. The analysis is too. Standard inputs and approaches ensure consistent outputs across said brands and countries.
But that’s still rather shot to sh*t in some businesses where said brands and countries are all now in different places, post covid. Cookie cutter no longer cuts it. The business questions are much harder and need experienced hands and heads.
I’m sure that those businesses will resume, the analytics is so embedded in their operational decision-making for them not to. My point is more about the nature of the current business questions that you might use MMM to answer.
And that if you are a business just embarking now on deeper marketing effectiveness evaluation, it’s perhaps the consultant’s sector knowledge or career experience rather than their skills as an econometrician that are of most value.
The true value of any quantitative research is only unlocked when the collaboration between business and consultant leads to a business being totally clear on what it should do next to better achieve its goals. Models don’t shout that on their own.
Covid, cookies and consulting are my three broad reasons why marketing mix modelling is so popular right now.
In whatever direction a business was affected covid obscured how other things were working. And it still is. Businesses who’ve never felt the need for this type of analysis have been shaken to their core and are giving it a go for the first time.
Different approaches come in and out of fashion. But marketing mix modelling, as one of the elder statesmen in marketing effectiveness, is not adversely impacted by what’s going on in the digital landscape.
The questions being asked are hard. Building a model is just the start. To interpret the model and measures you need a consultant who will engage the right people in your business, and work with them to generate actionable recommendations.
Get in touch if you think I can help you :)
© Jo Gordon Consulting Ltd 2022