- First, analyze your marketing data to see what’s working and glean strategies to use in the future.
- Media mix modeling helps you understand what’s contributing most to your ROI.
- Optimize your ad spend across different channels for maximum visibility and returns.
One of the main challenges affecting marketing departments and agencies today is gauging the performance of their marketing campaigns. Another is allocating funding across channels to maximize ROI and conversions.
Is your marketing team trying to optimize your ad spending to get more sales? You can more easily forecast future trends and plan accordingly when you analyze your advertising performance based on factors like ad spend and seasons.
This article has some informational gems on media mix modeling, including what it is, how it’s different from attribution modeling, and some best practices.
What Is Media Mix Modeling?
Media mix modeling, also known as marketing mix modeling, is a technique that analyzes the performance of marketing campaigns and how various factors affect conversion and ROI. Really, it measures how different elements contribute to your company’s return on investment.
You can determine what’s working and what’s not with these insights. Then, you can optimize your marketing strategies based on the season, marketing trends, and consumer preferences.
Think of Media Mix Modeling as Your Exercise Routine
Think of media mix modeling as an exercise routine. You might start off trying a variety of workouts, from weight lifting to running to yoga. Over time, you collect data on what you like and what’s working/not working for you based on your goals (whether it’s weight loss, building strength, just finding physical activity that you like, etc.). That allows you to customize a routine that gives you the best results for your effort.
With media mix modeling, you also collect marketing data (often for weeks, months, or years) with media mix marketing tools, then evaluate the impact on sales, ad spend, etc. Here’s how to use media mix modeling:
- Collect personal data: Personal data allows you to analyze data from the source. This way, you can accurately picture users and how they relate to a specific media channel.
- Work with digital channels: Measuring and analyzing marketing campaigns using media mix model tools is easier and more accurate when using digital channels than traditional advertising methods. It’s difficult to measure the results of a billboard or radio advert. Working with digital channels and achieving the right media mix for your organization gives you actionable insights for decision-making and enables you to measure ROI more accurately.
- Choose the right platform: Analytics software platforms collect user data and provide tracking reports. Determine the channels you’re analyzing, then choose a platform that affords you complete visibility.
- Choose the metrics for every channel: What marketing metrics do you want to measure? Picking the wrong metrics will give you the wrong picture. What you choose to measure depends on your goals on that channel.
- Analyze the data: You can analyze and come up with reports once you have data and metrics. Find the high-performing and low-performing channels and the audience targeted. What are your strengths and weaknesses? Knowing this can help improve and adjust your strategy.
- Understand customer sentiment and brand perception: Metrics and clicks are important but they are not the only factors to consider when analyzing marketing campaigns. Customer sentiment and how your audience perceives your brand can help you understand the reports.
A typical marketing initiative at any company uses several marketing channels. Its performance depends on how well you optimize it, the channels you choose to execute your marketing strategies, and the tools you use.
Media Mix Modeling Tools – The Big Three
What are the most common media mix modeling tools businesses use? Here are three.
Find Out What’s Speaking to People With the Attribution Model
It’s easy to understand specific points on the buyer’s journey and the impact of marketing efforts on different media channels with an attribution model. For instance, some marketers find email marketing effective for generating leads. Precise, accurate analysis lets you know the customer’s interactions throughout the journey.
What’s Trending With the Marketing Platform
An effective marketing platform will give you access to valuable insights and consumer trends. A solid platform will be able to track important metrics and analyze marketing data.
Get off the Hamster Wheel With Customer Insights and Reports
You don’t want to be like a hamster on a wheel, running yourself ragged while going nowhere. You won’t know what’s working now and what you can improve on without customer insights. They enable you to learn about customers’ habits that can inform your media mix strategies and impact your marketing decisions.
So, what is an example of media mix modeling? Let’s talk about it below.
What’s a Good Media Mix Modeling Example?
A car dealership marketer in charge of the marketing budget wants to know how each marketing channel contributes to sales. They spend on advertising in three different channels to increase sales – email marketing, Facebook ads, and Google ads.
They observe and collect sales data each week for about 52 weeks. If the sales were $400,000 in a particular quarter, the goal is to determine how much of the $400,000 was generated by email marketing. How much was from Facebook and Google ads? Also, how many sales would they have had if they hadn’t advertised?
Additionally, they can look at specific times when sales were high. Was it because of the season, such as holidays? The marketer can predict future sales and know which marketing channels are performing the best this way.
5 of the Best Ways to Explode Your Business With Media Mix Modeling
Marketing mix modeling can be the difference between well-performing ads and emails no one wants to open. Here are five best practices you can implement in your MMM to scale your business.
- Optimize your ad spend across different channels for maximum returns
- Define, track, and measure every interaction in the customer’s journey for proper accounting of revenue and cost
- Compare test and control markets, then use the insights to refine your model
- Identify revenue drivers and their impact
- Use time series for future forecasting
Following best practices like these and handling the challenges you encounter when implementing the model can significantly improve your marketing decisions and increase ROI. As they say, with knowledge, comes power.
Discovering Value With Media Mix Modeling Versus. Attribution Modeling
Attribution modeling focuses on analyzing a conversion path used by consumers and setting rules to determine how each point on the buyer’s journey contributes to sales, unlike media mix modeling. This approach examines data at every step and attempts to identify the value of each component in a marketing initiative.
You’ll Probably Find Attribution Modeling Easier
MMM focuses on understanding and analyzing historical marketing data to develop an optimal “mix” of the best-performing advertising channels. Attribution modeling, on the other hand, wants to measure and understand specific touchpoints in a consumer’s conversion path. In the digital media context, attribution modeling is like a subset of MMM.
MMM requires you to analyze marketing data using media mix modeling tools, making it difficult for the end-user. Attribution models don’t require heavy use of statistics. Additionally, they’re less prone to statistical errors and easily produce accurate reports, provided you feed your model with the correct data.
Explode Your Business With Media Mix Modeling!
Knowing which media channels perform best is crucial to coming up with marketing strategies. With media mix modeling, you can find these channels and optimize your campaigns for maximum returns. Ensuring that your historical marketing data is accurate and that you use an effective marketing platform will not only track your metrics but also give you insights to inform your strategies.
Partnering with an agency that utilizes media mix modeling can ensure maximum returns from your investment. Model B is an agency model driven by understanding audiences and marketing channels to deliver transformative results
We’ll analyze your data and develop media mix strategies to increase your conversion rates. Our wildly talented media experts and exceptional technology, Blueprint, ensure the success of your initiatives.
Want to explode your business with media mix modeling? Contact us today.