Boards and the C-suite expect CMOs to lead the way to profitable growth in 2023 despite various macroeconomic pressures making everything more expensive. With increasing pressure to prove the value of marketing, smart CMOs are turning to marketing mix modeling, or MMM, to improve media performance and quantify their impact.
The goal of MMM is to measure the impact of advertising and promotions across channels while controlling for external factors outside of a brand’s control. In its simplest form: MMM helps marketing leaders plan future marketing spend and measure the performance of past investments.
1. As a scorekeeper, to show the overall incremental impact marketing investments are having on the overall business. 2. As a forecaster, to predict the outcome that raising or lowering marketing budgets will have on marketing’s contribution to the overall budget. 3. As a coach, to suggest shifts to current marketing investments that improve performance.
While MMM offers significant opportunity to increase returns on media investments, the models require consistent reevaluation to consistently deliver the expected benefits. Organizations who have trust in their MMM also report higher growth compared to their industry peers.
1. Have you prioritized the insight objectives for your MMM? 2. Are you sufficiently assessing your marketing mix model to ensure predictions are delivering true incremental performance and can be trusted by executives? 3. Are you taking full advantage of the scenario planning, optimization and simulation opportunities that your MMM provides?
Across interviews with marketing leaders, we heard many talk about upcoming improvements to their MMM program. Everyone we spoke to could answer, “What is next for your marketing mix efforts?” So at least once a year, assemble key stakeholders involved in gathering the input data, building the models and using the results to adjust media plans.