How Media Mixed Modeling Can Help Measure the Success of Your Luxury Marketing Campaigns
Any marketer worth their salt can tell you that the accurate tracking of marketing campaigns is pivotal for informed decision-making. Precise data on ROI, successful ad spend, and channel effectiveness is necessary for making strategic investments.
Media Mixed Modeling is the answer to this need. It can provide a comprehensive analysis of diverse channels, while showing exactly what works — and what doesn’t — using hard data.
In this article, we explain exactly how you can use Media Mixed Modeling to measure success and create smarter and more efficient marketing strategies.
What Is Media Mixed Modeling?
Media Mixed Modeling (MMM) is a statistical analysis technique used by brands to quantify the impact of various marketing and advertising campaigns on the overall performance of a product or service.
When using MMM, the goal is to understand exactly what’s working — and what’s not — in order to optimize the allocation of resources across different media channels to maximize ROI and achieve goals.
Media Mixed Modeling looks at the four Ps — product, price, place, and promotion — and how these contribute to whatever the goal of the campaign may be. MMM allows you to link independent variables, like social engagement, to a dependent variable, such as revenue.
Example of Media Mixed Modeling
Here’s an example of MMM in action. Let’s say you’re a marketer for a high-end fashion brand that needs to optimize its strategy and ensure maximum ROI. Through MMM analysis, you may discover that while traditional channels, like fashion shows, contribute to brand prestige, digital efforts, especially influencer collaborations, significantly impact online engagement and sales.
With this insight, you and the rest of the marketing team can work to reallocate your budget, increasing investment in influencer partnerships and targeted online campaigns. As a result, the MMM model predicts a notable uptick in online sales and heightened brand visibility.
By balancing your efforts — and putting money where it will have the biggest impact — you’re able to maintain the allure and prestige of your brand while also attracting new customers and sales through your digital efforts.
Then, through continuous refinement of the MMM model, you'll be able to finetune your marketing efforts to stay relevant in the changing landscape of luxury fashion.
What Can Media Mixed Modeling Tell You?
Marketers can gain a lot of insights from Media Mixed Modeling. Let’s take a look at some of them in depth.
THE IMPACT OF SPECIFIC MARKETING ACTIVITY
MMM can help draw direct links between a specific marketing action — such as targeted ads on social, or a print ad in a magazine — and changes in sales.
While base sales are affected by indirect factors, including long-term trends and seasonality, incremental sales are driven by marketing and sales activities. These can be identified using MMM, to see the efficacy of each of your specific marketing efforts.
Being able to nail down exactly where revenue is coming from allows you to focus your strategy on the efforts that will have the biggest payoff.
THE RELATIONSHIP BETWEEN CHANGES IN PRICE AND CHANGES IN SALES
Sometimes, increasing your prices is unavoidable. With rising costs everywhere else, it’s the only way to make a profit.
However, you don’t want to lose customers as a direct result of changing your prices — and this is where MMM comes in.
Say, for example, you offer customers a monthly membership which gives them access to freebies, discounts, and sales. If you increase it by 10% per month, you may lose 5% of customers. But the revenue gained by the customers who remain loyal still makes the price increase worth it.
HOW CHANGES IN ADVERTISING STRATEGIES INFLUENCE SALES
As a luxury brand, chances are your advertising efforts stretch far and wide, across display ads, print, social media, and paid collaborations with other brands and influencers.
MMM allows you to compare these advertising efforts to an increase in sales or brand recognition. Not only can you see if it’s working, but you can also compare different styles of advertising to determine which is most effective.
Say you’re running video ads on YouTube, to be played before related videos. You can use MMM to answer key questions, including:
Do non-skippable ads lead to more click-throughs?
Do shorter video ads influence more sales than long ones?
Do your ads result in more sales for a certain demographic?
These can then be used to optimize your ad spend decisions, ensuring your money is going to the right place.
WHICH CHANNELS ARE MOST BENEFICIAL TO INVEST IN?
There’s no point in advertising on Facebook if your target demographic is Gen Zs. Similarly, you wouldn’t advertise on TikTok if you’re trying to reach an older and more affluent client base.
While those two examples sound obvious, many marketing choices aren’t quite so apparent — and MMM can help you figure those out.
If you run the numbers and find that partnering with a local retailer on Facebook leads to more sales than splashing out on a nationwide Instagram campaign, you’ll be able to redirect your distribution efforts and just focus on what works.
The great thing about MMM, especially when compared to other methods of data collection and analysis, is that it’s highly tailorable and can be used to measure a range of things, beyond just these few examples.
What Are The Benefits of Media Mixed Modelling?
Provides a comprehensive and holistic view of the entire campaign, allowing for a more integrated marketing strategy.
Gives data-driven insights into the performance of different marketing channels, enabling evidence-based decision-making.
Clarifies the contribution of each element in your marketing or advertising strategy.
Allows for scenario analysis, enabling you to simulate different budget allocations and strategies to predict their impact on sales and other key metrics.
Facilitates predictive modeling for forecasting.
Supports continuous refinement and can adapt to changes in consumer behavior.
Identifies cross-channel insights to see which channels are working together.
Does not use personally identifiable information, maintaining user privacy.
How to Build a Media Mix Model
Building a Media Mix Model involves several phases, each essential to the process. Here’s an overview.
DATA COLLECTION
To start, you need to gather comprehensive data related to marketing activities, sales, and other relevant metrics. This should come from a range of different channels (TV, radio, digital, social, print, events, etc.), and include data on everything from sales, website traffic, brand awareness, or any other relevant KPIs.
It’s worth investing the time to do this thoroughly and completely, to build a strong foundation for your analysis.
MODELING
With the data, you now develop a statistical model that represents the relationships between the marketing inputs and the business outcomes.
Start creating your MMM by choosing the dependent variable or business outcome (for example, sales or social media followers) you want to examine. Then, identify the independent variables (for example, ad spend, target audience, distribution channels, etc).
Once that’s done, you can assign value to your variables and create a mathematical model that will display the relationship between them.
DATA ANALYSIS
By applying the developed model created in stage two to the data collected in stage one, you can gain insights into the relationships between marketing efforts and business performance.
Interpret the statistical significance of the variables in your model to understand the impact of each marketing channel, then identify patterns, trends, and correlations in the data that provide actionable insights for decision-making.
OPTIMIZATION
Here, we use the insights gained from data analysis to optimize future marketing strategies and budget allocation.
Using information unearthed by a well-crafted MMM, we can adjust marketing budgets based on the quantified impact of each channel, conduct scenario analysis to explore hypothetical outcomes, fine-tune variables to maximize ROI, and continually refine the new model based on market changes.
MMMs help businesses analyze and optimize the impact of various marketing channels on sales and key performance indicators, using data-driven insights.
Getting Started With Media Mixed Modeling
When created and used correctly, a good MMM is essential for measuring the success of marketing and advertising campaigns, while ensuring resources are allocated to the most impactful channels for maximum ROI. Furthermore, MMMs support continuous refinement, adapting to changes in the market and consumer behavior for ongoing optimization.
However, as you may have gleaned from this article, they’re not the easiest to set up and maintain.
Gathering and processing comprehensive data from various channels can be tricky and resource-intensive, while developing accurate models requires expertise.
Partnering with an agency like Block & Tam ensures businesses benefit from expert guidance and support, minimizing the complexities and maximizing the advantages of MMMs. Find out how our Reporting & Analytics team can help you.
