Attribution vs. Marketing Mix Modeling


attribution vs. marketing mix modeling (mmm)


There are many challenges facing marketers today. One of the greatest is the continuous outpour of privacy changes and regulations. These ever-mutating policies are problematic on so many levels but critical when the data-loss impacts measurement. Now, add channel complexity and marketers are faced with a whole new level of difficulty when trying to accurately measure advertising performance.


Thankfully, there are two main approaches to solve for these evolving barriers: Marketing Attribution (MTA) or Marketing Mix Modeling (MMM). But before choosing an approach, the key consideration is data availability (or lack thereof). OptiMine will dive deep into these two common solutions (Marketing Attribution vs. Traditional Marketing Mix Modeling) to help you figure out which type of marketing measurement is best for you and your brand.



What is Marketing Attribution?


Marketing Attribution is the process of evaluating the marketing touchpoints a consumer encounters on the path to purchase. With this approach, ad impressions must be aligned with consumer/device identity data and credits the ad impressions that contribute to the desired outcome (Ex. conversions). In other words, marketing attribution provides tactical, detailed short-term measurement of a campaign’s impact on sales.





Types of Marketing Attribution Models


Many multi-touch attribution schemes are available in the market, from very simple unsophisticated approaches to extremely complex deployments requiring heavy resources and technology. Below is an overview of the most common attribution models, from simplest to most complex:



Pros of Marketing Attribution


The main benefits of marketing attribution are:



Cons of Marketing Attribution


The major downsides of marketing attribution are:




When to Use Marketing Attribution


Marketing attribution is best used in situations when you need tactical insights for short-term optimization.



What is Traditional Marketing Mix Modeling (MMM)?





Marketing Mix Modeling is a statistical method for building predictive models using multi-variate regression. These models evaluate media impressions and spend, non-marketing factors, and converting activity over time to measure the contributions of each of these elements towards conversions. These measures then allow the marketer to understand potential outcomes by evaluating different marketing investment levels or other scenarios.



Pros of Traditional MMM




The main advantages of traditional MMM are:



Cons of Traditional MMM



The disadvantages of traditional MMM are:



When to Use MMM


Marketing Mix Modeling is best used when a brand wants to understand and measure the incremental contributions of their marketing. Specifically, when the brand has a mix of digital and traditional marketing channels.


With a more complex media mix, MMM is an ideal fit and can handle this kind of marketing complexity as well as help the brand get more performance/efficiency from their marketing budget.



What are the Main Differences Between Marketing Attribution and Marketing Mix Modeling?


Attribution focuses more on individual user interactions, while marketing mix modeling takes more of a top-down, macro-level view (draws on marketing and sales data, revenue, benchmarks, costs, outside factors, etc.).


Additionally, marketing mix modeling solutions (such as OptiMine) are future-proof in the sense that they are completely unaffected by the plethora of consumer privacy changes and regulations, while marketing attribution is being completely disrupted by these same changes and regulations.



Attribution Modeling vs. Marketing Mix Modeling: Which is Better?


Simply put, marketing mix modeling is a far better solution for those who have the budget and means for it. Plus, with advances in AI and high-speed computing, MMM is becoming more and more affordable. It is also a much safer choice when compared to attribution modeling due to the continuous flow of consumer privacy changes and regulations that negatively impact attribution modeling, because it is based on real and valid science (applied linear regression) instead of using consumer identity tracking.



Attribution Modeling vs. Marketing Mix Modeling



Attribution Modeling Marketing Mix Modeling

Uses individual identity data

Uses regression models

Is negatively affected by new consumer privacy changes and regulations

Is unaffected by new consumer privacy changes and regulations

Creates (financial and legal) risks for your brand through the use of identity tracking methods if not in compliance with privacy regulations

No financial or legal risks due to compliance issues with privacy regulations because MMM does not rely on tracking

More of a bottom-up approach

More of a top-down approach

Often based on a guessing game of which ad(s) should receive credit

Based on real and valid science (applied linear regression models)




The Best Option: A New, Modern Approach to MMM


There is a new, modern approach to Marketing Mix Modeling using AI, high-speed computing and data science that solves the shortcomings of traditional MMM. Modern MMM is:





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It is built to match the speed of today’s ultra-competitive market and matches the pace of a brand’s decisions. Traditional MMM is too slow, and brands continually complain that they get MMM results too late.






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Modern MMM is built for today’s complex data environment. This “data first” approach of modern MMM allows brands to adapt quickly, evolve the question they pose to analytics, and adjust to the constantly changing data environment.




Delivers detailed, actionable guidance.


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A common complaint of traditional MMM is that the guidance is too summarized to be actionable. Results and reads at channel levels using data that is summarized by week or month doesn’t cut it anymore. Brands are under enormous financial pressures and detailed guidance delivers ROI and lift opportunities missed by traditional MMM solutions that can’t produce campaign-level measures.


With the detailed guidance that modern MMM delivers, brands can act immediately on the suggestions provided.


As you can see, traditional MMM’s biggest drawbacks have been rectified in Marketing Mix Modeling’s proven, modern approach, making the next generation of MMM the superior form of marketing measurement.


Solve today’s marketing measurement quandaries by using a proven modern approach to Marketing Mix Modeling. Contact OptiMine to learn more!







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