❌ Don’t fall for these Marketing Mix Modeling (MMM) myths:
1️⃣ ”MMM only provides high-level insights”
2️⃣ ”MMM is laboursome to maintain”
3️⃣ ”MMM doesn't make sense if you have less than 5M USD/EUR annual marketing spend and only 1-2 ad platforms in use”
I’ve read a lot of MMM conversations in LinkedIn recently, and I see surprisingly many people base their understanding of MMM to what MMM used to be 5-10 years ago. Time to update your knowledge about MMM.
1️⃣ ”MMM only provides high-level insights”
Back in the day, MMM was only able to provide high-level media ROI comparisons, e.g., TV vs Facebook. It was mainly used once a year in annual budget planning. Today, best MMMs can go at least one level deeper in media (”TV spots, TV sponsorships, FB prospecting, FB retargeting, FB brand awareness, …”) and include campaign-level insights (Black friday week campaign, Summer campaign, ...). Deeper insights mean that MMM is also relevant in more tactical use-cases. For ecoms with majority of spend in digital media, you can even go deeper.
2️⃣ ”MMM is laboursome to maintain”
This belief dates back to the pre-data connector era. Today, MMM is easy to maintain if your MMM solution does the following:- Digital media data deliveries are automated with data connectors (like Supermetrics)- Sales/conversion data deliveries are automated with data connectors from data warehouse, ecom platform or GA4- Offline media data deliveries are automated from a data warehouse, or alternatively with standard data templates with a clearly defined owner.
3️⃣ ”MMM doesn't make sense if you have less than 5M USD/EUR annual marketing spend and only 1-2 ad platforms in use”
MMM's value is realized when you re-allocate your marketing budget to the highest ROI activities, so that you drive more sales and profit with marketing. This means that the more you spend and the more budget allocation decisions you have, the more valuable MMM is for you. But the old rule-of-thumbs around "when does it make sense to do MMM", don't hold true anymore, because 1) MMM can provide more granular insights, and 2) automation and other developments have driven down the cost of MMM. For example, even if you would only do Facebook marketing, you can still optimize across FB prospecting, FB retargeting, FB brand awareness and so on. We have customers with less than 1M EUR/USD annual marketing spend getting lots of value from MMM. We always recommend to build a business case for MMM, before taking MMM into use.