O Marketing Mix Modeling (HMM) is an econometric technique applied to Marketing, which uses data science to predict the impact of investment in media on sales.
This technique has increasingly aroused the interest of professionals who seek to understand the real impact of their marketing actions, reemerging at the conversation tables mainly because of the advances of Artificial Intelligence, which makes it possible more accurate result predictions, personalizing the analyses, real-time optimization and identification of complex insights.
On the other hand, there is still a lot of confusion about How does the model work and, most importantly, How can it be applied on a daily basis of Media, Growth and Marketing professionals, who live on the border between strategy and performance.
Often we are faced with incorrect or exaggerated assumptions about the potential of Marketing Mix Modeling and we have heard many fearful comments, such as “this is not for me, my sector is very complex” or “I don't think this model works”.
In this article, we want to address the main myths surrounding the MMM and clarify what really is true and how this powerful tool can help you broaden your vision of results, demystifying ideas such as”MMM is only for large companies” or”MMM cannot measure offline channels, such as TV and OOH”.
We will address the main doubts and beliefs that we have collected in the market, showing how this methodology can be a key part of a smarter media management based on real data.
Myth #1: Marketing Mix Modeling is only for advertisers who invest offline
One thing that few people know about MMM is that it can be used to measure the impact of activities of marketing online and offline, regardless of whether you invest in both or if you only invest in digital.
This makes it a valuable tool for companies that invest in a variety of channels, since it is able to measure both the impact of traditional media - how Radio, TV and OOH - How much of digital media and influencers, for example.
Myth #2: Marketing Mix Modeling only measures short-term actions
MMM can be used to measure the impact of long-term marketing campaigns.
This is because the purpose of the model is to understand the cumulative impact of marketing efforts over time, giving a complete view of the sales funnel. Unlike methodologies such as last-click attribution, Marketing Mix Modeling is able to understand how top and middle funnel campaigns support conversion, offering greater clarity of the results generated, including branding actions.
Myth #3: Marketing Mix Modeling is only for large companies
This is a common misconception about MMM. While it is true that it is a valuable tool for companies that invest extensively in different channels, it can also be beneficial for businesses that invest up to R$ 3MM in media per year.
In fact, Marketing Mix Modeling can be especially useful in these cases, since companies with smaller budgets seek to get the most out of their marketing investments.
Myth #4: Marketing Mix Modeling is too expensive
MMM can be a cost-effective way to measure the impact of your marketing campaigns, especially considering the return that the solution can bring by helping to better distribute media funds.
Myth #5: Marketing Mix Modeling is very complex
By nature, MMM can be a complex topic, but it's not necessary to have a deep knowledge of statistics to use it.
There are a number of resources available for you to learn more about MMM, and many MMM solutions are designed to be easy to use, even by those who have never had contact with a model before.
Myth #6: Marketing Mix Modeling isn't necessary
MMM can be a very accurate way to measure the impact of your marketing campaigns, especially if your purpose is to understand the contribution of different channels and objectives in a full-funnel strategy.
However, it is important to remember that MMM is a model and all models have some degree of error, since not all variables are controllable. The accuracy of an MMM model will depend on the quality of the data used to create it.
Myth #7: Marketing Mix Modeling isn't actionable
The MMM is a valuable decision-making tool for marketing leaders, as the insights the model provides can help you identify which marketing campaigns are most effective at each stage of the funnel and which need adjustments.
In addition, the model is also able to show how aspects that are beyond the purview of Marketing - such as seasonality, inflation, or even weather - can interfere with results.
This information can help you allocate your marketing budget more effectively, guided by the most important metric for a company's health: revenue.
Are you interested in learning more about Marketing Mix Modeling and media optimization?
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