Marketing Mix Modeling

The purpose of marketing mix modeling is to understand how various marketing inputs are driving the business metrics of a product or service. A simple way to put this is what is working and what’s not? Otherwise known as MMM, it will determine how each marketing input is contributing to a sale. In turn, you will determine how much to spend on each aspect. There are incremental drivers and base drivers that promote marketing techniques.

1. Incremental: generated by marketing activities like TV, print ads, digital spends, discounts, social, etc.

   1. ATL (above the line) marketing: non-targeted with a wide reach

   2. BTL (below the line) marketing: specific, direct ads on targeted audience

   3. TTL (through the line) marketing: mix of both

   4. Competition

   5. Halo effect

   6. Cannibalization effect

**more on these last two in future articles**

1. Base drivers: reached without any ads. Equity over years being the driving factor

   1. Price

   2. Distribution

   3. Seasonality

   4. Macro-econ variables

There are a few reasons to implement MMM, some of which we mentioned already,

1. Efficient spending

2. Efficient execution of campaigns

3. Scenario tests

You can really go down the mix marketing rabbit hole online. There is a vast amount of knowledge out there on the topic that includes words like regression analysis and mathematical equations. We only wanted to touch the surface of the MMM waters in order to hopefully inform someone who didn’t know about it. Now it’s your turn to dive in.