This article is part of Sellforte's MMM Procurement guide. We are in chapter 2B of the guide, as illustrated below:

Opening an MMM project at your company requires 3 activities:

In this article, we will go through the most typical use-cases that companies are expecting from MMM.

Below is a summary of most typical use-cases for Marketing Mix Modeling

Next, we will discuss each of these use-cases one-by-one. To make it more concrete, we will also illustrate the use-cases in Sellforte's platform, using the Sellforte demo.

This use-case covers the most fundamental question for the marketing function: What is marketing's role in driving company's business performance? How much is the company getting back for each euro/dollar invested in marketing? As such, this use-case is highly interesting for the C-level stakeholders, including CMO, CFO, while of course being relevant for the whole marketing team.

Understand marketing’s incrementality vs. base and other factors: Marketing's contribution to company's sales can vary from company, and Marketing Mix Modeling helps reveal it for your company. In the example below, "base" is ca. 80%, discounts are ca. 10%, and media contributes the remaining 10%.

Track overall performance KPIs, such as ROI, marketing-driven sales: Improving marketing ROI starts from measuring it, and tracking how it develops over time. In the example below, company gets 3,39EUR sales back for every 1EUR invested in marketing.

Understand each media channel’s contribution to performance: After the big picture is getting clear, it's time to dive deeper. How are the different media channels contributing to marketing performance. Below are a few good overviews to start from, first one telling the share of each medium from marketing-driven sales, and the second one telling the ROI of each medium.

Understand each campaign’s contribution to performance: Most Marketing Mix Solutions focus on understanding media performance, but forget that most marketing execution is actually done in campaigns. Example below summarizes how different campaigns are contributing to a company's business performance.

The previous use-case focused on understanding current marketing performance, which provides the foundation for making better decisions in the future.

This use-case focuses on optimizing future performance. One key decision in future planning, is annual planning. Marketing Mix Modeling helps by suggesting optimal budget allocations.

Get recommended budget by media channel: Marketing Mix Modeling can provide optimal budget allocations into different media. Below is an example from Sellforte's Media Optimizer, where the user has selected optimization parameters on the left, and can see the optimal budget allocation and expected ROI and sales on the right.

It is also important to understand how that budget would be split over time, since most businesses have strong seasonality effects. Below is another example from Sellforte media optimizer, showing budget pacing over months.

Get recommended budget by campaign and by media channel: This is otherwise similar to the previous one, but goes one level deeper. Instead of looking at media on a high-level, it suggest optimal media allocation by campaign and by media. This is often more actionable than the pure media allocation, since marketers often execute their marketing in campaigns. Below chart show the first layer of allocation, campaigns, after which the marketing team can dive deeper into media in the campaigns.

Test budget allocation scenarios: As part of budget planning, it is also important to test different scenarios. For example, the marketing team might want to argue more budget to from the CFO by building a business case for it. Or the CFO might ask to cut costs, and the marketing team can help the CFO to understand cost cutting's implication to company's sales. Budget allocation scenarios can be easily tested with Sellforte's Media Optimizer by first changing total media investments to optimize, as illustrated below.

After creating a new scenario, the marketing team can compare scenarios against each other, as illustrated below.

For multi-brand or multinational companies - Get recommended budget by brand or by country: Companies that operate in multiple countries or have multiple brands should also evaluate optimal budget allocation across them as part of annual planinng. Marketing Mix Modeling can also help in this use-case, if the scope of MMM covers the most important countries/brands. Below is an example of an optimization done for a company operating the US and the UK.

Note: With "campaign type" we refer to the main campaign that includes several media

The two previous use-cases focused on looking at high-level marketing performance, and allocation of total marketing budget. These are often also referred to as "strategic use-cases" of MMM. Next we will get closer to "tactical" use-cases, starting from tracking performance of campaign types.

Review total performance for campaign types: Good starting point for understanding performance for a campaign type is to look at how different campaign types compare against each other in terms of ROI, media investment, media-driven sales. Below is an example comparison view for campaign types at the end of a quarter.

Review performance by media channel within the campaign type: Next step is to dive deeper into media within a campaign type. This can be done in several ways, for example by looking at them in a table view.

Below is another way of reviewing media performance within a campaign type.

Note: With "campaign type" we refer to the main campaign that includes several media

Planning a campaign (campaign type) is a business-critical process for the marketing team. The overall marketing performance, in the end, is the result from how the campaigns (campaign types) have performed. Many aspects have to be considered in a succesful planning, and having an optimal budget allocation across different media is one of them.

Get recommended spend by media channel and timing: Marketing Mix Modeling can provide optimal budget allocations across media for different campaign types. Below is an example from Sellforte's Media Optimizer, where the user has optimized an optimized "always-on"-campaign type.

In addition to the total budget, it is relevant for the marketing team to understand how the investments should be split over time. Below is an examaple from Sellforte media optimizer on recommended monthly budget allocation.

Test budget allocation scenarios: Similarly, than in annual planning, it is helpful for the marketing team to assess how performance of the campaign type would change under different budget scenarios. Pictures below show comparison of two different scenarios.

Note: Here "campaign" refers to an individual campaign set up in an ad platform

Review performance of campaigns in the last week/day: Most advanced Marketing Mix Modeling solutions today can track performance of individual campaigns. Below is an example from Sellforte demo, which shows a summary of Facebook Ads campaigns in the last week.

Now that you have the business case in place, and have defined what use-case you expect to realize with MMM, it's time to Prepare materials for a management approval, so that you get management's buy-in to start evaluating how to implement MMM at your company! We are preparing an article on this topic - stay tuned!

Interested to learn more?