Four media mix modeling triggers all marketers should know
Media mix modeling is a powerful technology that answers many common challenges marketers face when building media mixes.
With many different ways to evaluate media mixes, it can be difficult to determine which approach is best for answering the questions that marketers have. For example, how is a media mix driving revenue? How is the current economic climate impacting the media performance? What is the best combination of media to reach your target audience? All of these questions, and more, can be answered by leveraging advanced marketing science tactics, such as media mix modeling.
At Collective Measures, our media mix modeling (MMM) capabilities are powered by our proprietary intelligence engine, Practix. We begin by collecting client data — such as historical media performance and revenue — and layering it alongside other external datasets (like macroeconomic factors) to evaluate millions of media mixes and media’s incremental contribution to conversion. Then, using all the data at our fingertips, our data engineers and media strategists interpret the results for clients, providing recommendations for the top media mixes based on each individual client’s business goals to ensure media can be allocated more effectively.
Needless to say, MMM can offer many solutions to the challenges that marketing leaders may face. But, when should marketers leverage MMM? Here are the top four triggers marketers should be on the lookout for:
1. How do I know if the media is driving revenue?
Because the data privacy landscape is constantly evolving, tying revenue back to media is becoming an increasingly difficult task. With far less visibility into consumers’ purchases, marketers are relying on projections and inferences that are less data informed. But MMM can help fill this gap. Traditional MMM tools ingest a brand’s media spend, performance data, and other brand-specific factors such as promotions to create an all-encompassing viewpoint of the campaign’s data. But at Collective Measures, our MMM analysis doesn’t stop there. We also layer on external factors that may impact the media, like inflation and unemployment rates. From there, our experts extract not only the revenue that the media drove, but also provide insight down to the campaign and/or channel level to understand how each element contributed to overall revenue growth and sales goals. This enables marketers to garner deeper insights about the impact media has on the most important business outcomes.
2. How can I prove that awareness media impacts conversions?
Awareness media helps keep a brand top of mind with consumers, but historically it has been difficult to quantify its effectiveness. So, what’s a marketer to do? Leverage MMM. By analyzing consumer behavior and purchase patterns, MMM connects awareness media campaigns to conversions. This results in a snapshot of the awareness campaigns that are contributing to revenue.
One proprietary analysis we conduct is a revenue impact study. This analysis dives into specific campaigns and connects them back to business results to understand how each individual campaign contributed to revenue. With this information, we are able to forecast the impact future media will have on revenue. This enables our media strategists to make predictive, data-informed recommendations for how to continue to drive success for brands.
3. How can I understand the impact macroeconomic factors have on business results?
Operating and making decisions based solely on business metrics means decisions are made in a vacuum. By including macroeconomic trends and data too, brands are able to make decisions based on the full picture, rather than just a snapshot of reality. We all know that macroeconomic factors — think unemployment rate, total vehicle sales, consumer confidence, and more — can greatly impact a business’s performance. But as a marketer, it can be difficult to understand exactly how factors like this impact media performance for a variety of reasons: (1) an analysis like this is complicated at baseline, (2) hunting down desired macroeconomic datasets is a challenge in and of itself, and (3) even once macroeconomic data are procured, it comes through in disparate datasets that are hard to piece together.
We’ve developed a process that makes accessing multiple macroeconomic datasets not only doable, but efficient and extremely effective. Our team of data engineers review a multitude of external indicators (consumer spending, market trends, etc.) to determine which are the most relevant factors to a given brand. Then, we port them into Practix and dig in to understand which factors impact a brand’s media efforts. This allows our media teams to develop media plans that utilize all the information available to drive the strongest business results in nearly real time, and helps our clients make more informed business decisions.
4. How can I take a data-driven approach to media planning?
When creating a media plan, marketers can leverage a multitude of approaches and data sources to identify the best tactics to realize business objectives. However, some approaches are more successful than others. Using MMM to inform media plan creation, marketers can take a data-driven approach to media planning that incorporates insights from both the client’s specific industry and previous business results. At Collective Measures, MMM analyzes historical performance data, consumer behavior, and purchase patterns, and uses them to track the effectiveness of different media channels, campaigns, and tactics for the brand. The outcome? Rather than taking generalized industry data and connecting them back to a brand’s media goals, our approach to MMM provides clients with a customized, actionable path to drive success.
What marketers need to know
When marketers are able to identify the right triggers, media mix modeling can help brands stay one step ahead. Using historical, external, and business data, Collective Measures’ approach to MMM can help fuel success for brands looking to take a data-driven approach to media planning. Fueled by a team of data engineers, statisticians, and media experts, we have the know-how to partner with our clients to leverage the power of MMM to drive real business results. Get in touch with our team today to learn how we can help you leverage this powerful capability to stay one step ahead of your competition.