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How does Marketing Mix Modeling (MMM) help marketing teams?
How does Marketing Mix Modeling (MMM) help marketing teams?
Lauri Potka avatar
Written by Lauri Potka
Updated over a week ago

Marketing Mix Modeling (MMM) can help marketing teams in many ways:

1. Understanding the true impact of marketing

The most basic benefit is that marketing teams can understand the true impact of marketing. Marketing Mix Modeling provides an estimate for what portion of sales was driven by marketing, and what portion sales, would have been achieved without marketing activities, which is called the base sales. By knowing how much incremental sales marketing is driving, we can calculate how many Euros or Dollars does one Euro or Dollar invested in marketing bring back in sales or margins.

2. Finding optimal budget levels, and optimal budget allocation

Marketing Mix Modeling helps marketing teams to find optimal budget levels for the overall marketing budget, as well as optimal budget allocations across media and campaigns within the specified budget. For example, Sellforte's Marketing Mix Modeling platform includes an optimizer tool, which you can try out for free and without sign-up at Examples of questions that can be analysed:

  • If I invest €1M more in marketing, how does it influence my sales?

  • If my budget is €X, what is the optimal allocation for each campaign and media?

3. Finding saturation points for media

Marketing Mix Modeling provides an estimate how quickly each media saturates. This is also referred to as the diminishing returns effect. For example, online display ads have limited inventories for different audience types, meaning that there is a point after which return for each additional Euro or Dollar invested in display ads starts diminishing faster.

4. Learning from past activities

Marketing Mix Modeling enables a continuous learning loop for the marketing team. By establishing a routine for regularly reviewing which marketing activities are delivering results and which are not, marketing teams can continously learn from the campaigns they execute. Marketing teams can for example consider:

  • What type of campaigns have been working well?

  • What type of media have perfromed well in certain campaigns?

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