Why do we need MMM?

Media mix modeling (MMM) is needed for several important reasons:

Holistic Marketing Evaluation

MMM provides a comprehensive view of how different marketing channels and activities contribute to business outcomes. It allows marketers to:

• Measure the impact of both online and offline marketing efforts simultaneously

• Understand cross-channel effects and how different marketing channels interact

• Account for external factors like seasonality, economic conditions, and competitor actions

This holistic approach helps marketers gain a more accurate understanding of their overall marketing performance.

Data-Driven Decision Making

MMM enables marketers to make more informed, data-driven decisions about their marketing strategies:

• Optimize budget allocation across different channels based on their effectiveness

• Identify which marketing tactics provide the best return on investment (ROI)

• Run different campaign scenarios to predict outcomes and reach key performance indicators (KPIs)

Long-Term Insights and Forecasting

Unlike some other attribution methods, MMM offers valuable long-term insights:

• Captures long-term brand building effects alongside immediate sales impacts

• Allows for sales forecasting based on different marketing scenarios

• Helps predict future performance of channels based on optimized spend allocation

Privacy-Compliant Analysis

In an era of increasing privacy regulations and reduced access to individual user data, MMM provides a privacy-friendly approach to marketing analysis:

• Relies on aggregated data rather than individual user-level information

• Offers a viable alternative in the post-cookie and post-IDFA landscape

Continuous Improvement

MMM supports ongoing optimization of marketing strategies:

• Allows for regular updates and refinements to adapt to changing market conditions

• Enables A/B testing of various marketing activities

• Helps identify underperforming channels or campaigns for resource reallocation

By providing these benefits, MMM helps marketers demonstrate the value of their efforts, improve marketing effectiveness, and ultimately drive better business outcomes.