How Marketing Mix Modeling Can Boost ROI

Jun 22, 2017

If you are looking for a tool which helps you gain a clear insight on ROI, and helps in better allocation of the marketing budget – then marketing mix modelling (MMM) is the tool you should be using. By analyzing the past records, this tool understands the relationship between the marketing spends and business performance to ascertain factors which are driving the business. MMM also recommends ways in which the product quality can be improved and the marketing programs can be enhanced.

How does MMM measure marketing performance?

The very structure of MMM works on the principles of microeconomics. It takes consumer demands ranging from a single product to interactive systems of brand choices into consideration to know what is working and what is not in the market. This model separates product sales into the base and incremental volumes to estimate the demand response to marketing investments. MMM, therefore, very intelligently captures both the short-term as well as long-term parameters to arrive at a realistic conclusion on the performance of the marketing strategy.

The rule on which the marketing mix model works is that the same product will be received differently in two different markets. By taking aspects like variations in product demand, economic, and geographic conditions into account, MMM helps marketers throughout the globe to optimize their spending and enhance their ROI.

To know more about marketing mix model’s role in boosting ROI, speak to our experts.

How the Marketing Mix Model can Quantify and Improve ROI of Search Engine Marketing

Online retailers use multiple marketing channels like SEM, SEO, and electronic marketing campaigns to promote their product and services. Often it becomes difficult to capture the cross-channel effect of SEM and its influence on the ROI. By analyzing data generated through conversion rates and click-through rates, MMM effectively captures the bid prices and conversion rates of each keyword on a real-time basis. The tool also establishes a relationship between the bid price and click-through rate to know the profitability of each keyword.

The result is a list of highly optimized keywords which enables the retailer to garner maximum profit across multiple marketing channels. MMM enables online retailers to transfer their spends from non-profitable keywords and allocate it to those keywords which are performing better.

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