Yes, you may have heard of it, you may even have a decent working knowledge, but what exactly is ‘marketing mix modelling’ (MMM), who is it for, and why should you care?
To cut through the chaff and get to the guts of it, Mutinex’s own Co-founder Matt Farrugia sat down with Kevin Alphonso (Senior Marketing Manager at SEEK) and Daniel King (Key Customer Account Manager at Supermetrics) to have a frank chat about the realistic application of marketing mix modelling.
At the heart of the chat will be a discussion of when a business should be looking to harness the insightful powers of marketing mix modelling, how the internal decision making process functions, and a real world look at how it improved marketing for a company as ubiquitous as SEEK.
So what is MMM in a nutshell?
From here on in, we’ll saturate ourselves in the correct jargon and simply call marketing mix modelling ‘MMM’.
To kick us off we’ll take a broad glance at MMM courtesy of Matt Farrugia,
“MMM is designed to help you optimise your marketing investments and ultimately make better decisions around marketing. It helps businesses leverage their data to create actionable insights and improve ROI, with a focus on granular real-time decision making”.
Let’s get a bit more specific shall we?
“It’s a statistical analysis technique used to measure the impact of various marketing tactics on sales, and to forecast the impact of future marketing strategies. It uses historical data to understand the relationship between marketing efforts across a number of channels such as TV, radio, or digital, and the subsequent impact on sales. Furthermore, it also helps you parse out other factors impa ting sales and revenue that were not marketing related such as interest rates or the weather.”
Why is this a discussion you should be having now to stay ahead of the curve?
Should you be queuing up a meeting to toy with the idea of MMM? Possibly. This depends on your sensitivity to a variety of factors in the marketing landscape.
Quite briefly, as Matt explains,
“MMM for the modern marketer is like GPS for a pilot. Without it, you’re flying blind. It’s almost critical in today’s world due to the increased complexity of the marketing climate.”
A few key factors underpin the critical nature of MMM:
- An increasingly complex marketing landscape
- An expanding number of channels
- An overwhelming amount of data which needs interpreting
- Evolving consumer behaviours
- Economic uncertainty
- The desire for a holistic view of marketing efforts
- Increased competition
- Privacy regulations and de-personalisation of data
- The need to identify and reduce wasteful spend
If these factors resonate, it may be time to start playing more seriously with this idea.
Who should care about MMM?
Not everyone will need such a powerful tool at the present moment. Indeed, many of you may be looking a year or two ahead, to a time where MMM could empower productivity and CEO support.
Some of you may be negotiating a budget or constructing an internal case for MMM.
For others, especially enterprise businesses who value a deeper understanding of ROI, MMM implementation should already be front of mind or in progress.
If you answer ‘yes’ to any of the following, you should be likely be having this MMM discussion internally.
- Are you impacted by seasonality?
- Are you drowning in large amounts of marketing data?
- Do you desire better internal marketing-related stakeholder communication?
- Do you lack visibility over marketing’s impact on sales?
- Would a holistic overview of marketing channel impact be valuable?
Why did SEEK harness MMM in their marketing strategy?
Let’s look at a grounded example of MMM in operation by chatting with Kevin Alphonso, the Senior Marketing Manager at SEEK.
As Kevin tells us,
“We’re Australia’s leading marketplace for employment. As you can imagine we have a lot of business metrics coming in. While we can attribute visits to lower funnel marketing, you can’t get a complete picture of other parts like brand marketing and sponsorships. That’s where MMM really helps give you the complete impact of your end-to-end funnel.”
“Sometimes you can look at channels in isolation, but how do they work across the entire funnel and contribute to each other in the entire lifecycle? That was something we were looking to understand.”, said Kevin.
MMM also helps SEEK separate out marketing’s impact on sales as opposed to other contributing factors, helping them drill down on what’s working and what’s not in their marketing mix, and quantifying that contribution to revenue.
Furthermore (something that may resonate with many marketers out there) Kevin noted that being able to have marketing discussions with other internal stakeholders like finance, sales, or c-level executives, requires a common language that MMM can provide.
This common language with stakeholders and the ability to justify marketing efforts internally leads us to another salient point…
Having the internal conversation around marketing effectiveness and MMM
When MMM comes up in your organisation, one of the key factors, outside of the value of every day measurement, is the ability to communicate value, ROI, and establish a common dialogue around marketing budgets, channels, and effectiveness.
As Matt echoes,
“Unifying the language around marketing metrics is so important, and often overlooked. We’ve all seen it – If you take a report to c-suite and you say ‘we have this many shares and comments’, the answer is ‘what does that mean to the bottom line? What does that mean for growth?’ What MMM does is help marketing have more valuable conversations around marketing’s contribution to the organisation’s success metrics and the bottom line.”
In this way, those in your organisation that focus on marketing effectiveness and ROI can start to re-envision marketing as a revenue driver, not a cost centre.
There’s so much more to this discussion.To gain a deeper understanding of marketing mix conversions, the questions MMM can answer, how to make a successful case for MMM internally, and more, watch the in-depth discussion in its entirety…