Why is Marketing Mix Modeling Inevitable for Your Business?
Ideally, marketing strategies are hatched by using primary and secondary media research, but if you do not measure the marketing effectiveness, you might be missing out on some vital information. Marketers often face the challenge of correctly analyzing and determining the effectiveness of their campaigns across online and offline marketing channels. This is where advanced analytics tools such as marketing mix models come handy. Marketing mix modeling refers to the statistical analysis that is carried out to estimate the past impact and predict future prospects of various marketing tactics on sales. Marketing mix modeling has gained wide popularity in the in the retail and consumer packaged goods industry. Apart from these industries, this technique has also garnered considerable attention in the healthcare industry, telecom industry, banking and insurance industry, and financial services. Given below are a few ways in which marketing mix modeling proves to be a more comprehensive approach when compared to traditional test marketing techniques:
Leverage insights to drive marketing effectiveness
The conventional methods of measuring campaign performance are expensive and time-consuming. Marketing professionals can gain data-driven insights to deliver profitable results by using marketing mix modeling. This advanced analytics technique helps organizations to procure insights quickly, simultaneously expediting strategic decision making.
Gives the complete picture
The marketing mix modeling technique provides companies with a 360-degree perspective of marketing effectiveness and also helps them to calculate the marketing ROI. The technique analyzes in detail the external as well as internal factors that affect the offline and online media channels. This method is a more accurate measure of the marketing mix variables as it takes into account the current and future attribution of the variables.
Combination of customer insights and digital attribution
With digital attribution, marketing mix modeling helps in optimizing market efforts and measures the increase in profit and revenue by undertaking specific campaigns. When measuring ROI from marketing campaigns, companies must understand that each key performance indicator(KPI) includes smaller levels that vary in intensity. To drive marketing campaigns and derive better insights, it is highly essential to bring together digital attributions and customer insights.
Facilitates change management in the organization
To drive profits, organizations need to head forward and embrace new techniques and processes to unlock their hidden potential. In today’s fast-paced world marketers look for quick insights and results in that budget allocation to facilitate strategic decision making. Hence, companies gain an integrated platform through marketing mix modeling that provides data-driven facts and digital attribution to create a sustainable competitive advantage for marketing professionals.
Few thumb rules that businesses must keep in mind while undertaking marketing mix modeling:
- Keep it simple – The marketing variables must be focused on a limited number of significant marketing variables. Cluttering up the model with a large number of trivial variables can complicate and confuse the modeling work.
- Be realistic – Marketing mix modeling might not pay off immediately. Marketers must come to terms with this and not be impatient and expect results in the short-run.
- Seek top management support – While modeling the marketing mix it is essential to involve the top leadership and the senior management in the organization. This is highly important during the initial stages of planning. Their valuable insights from years of experience will ensure the success of the modeling effort.