The Pros and Cons of Marketing Mix Modeling (MMM)


If you’re in the market for a new marketing measurement solution, you are likely in the process of researching your options. If so– you’ve come to the right place! OptiMine is here with the pros and cons of Marketing Mix Modeling to help you make the right decision for your brand.


First and foremost, it is important to distinguish the difference between this “Traditional MMM” which was designed many years ago and “Modern MMM,” which has evolved to meet the marketing needs of today by using AI, high-speed computing and data science. In a nutshell, Modern MMM solves the shortcomings of Traditional MMM. This blog post will discuss the benefits of using Modern (or “Agile”) Marketing Mix Modeling vs. the disadvantages of Traditional Marketing Mix Modeling.



A Brief Overview of Marketing Mix Modeling


Marketing Mix Modeling, also known as Media Mix Modeling— or “MMM” for short— is a statistical method for building predictive models using multivariate regression. The models evaluate media impressions and spend, non-marketing factors such as economic conditions or other elements that move business performance and converting activity over time. This is done to measure the contributions of each of these elements towards conversions (sales, traffic, customer acquisitions, engagement, branding impacts, etc.). These measures then allow the marketer to understand potential outcomes by evaluating different marketing investment levels or other scenarios.



Marketing mix modeling on laptop



Benefits of Agile Marketing Mix Modeling


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There are many advantages to using Modern MMM:





It is built to match the speed of today’s ultra-competitive market and matches the pace of a brand’s decisions.





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



Delivers Detailed Actionable Guidance.


With the detailed guidance that Modern MMM delivers, brands can act immediately on the data provided (unlike with Traditional Marketing Mix Modeling).



The Ability to Estimate And Measure Media Saturation and Yield Levels.


Modern MMM estimates and measures media saturation and yield levels, which allows marketers the ability to pinpoint optimal investment levels.



Scenario Planning and Budget Optimization Capabilities.


Some Modern MMM solutions also provide budget and media plan optimization capabilities. These optimization tools examine different investment levels across the entire marketing budget to create the most optimal allocation to achieve a goal or outcome. These optimization tools are beneficial because they allow marketers to make better financial decisions as well as make a case to their finance teams for specific investment approaches that will benefit the overall business.



Uses No PII.


A marketing measurement solution that won’t pose a risk to you (or your brand) due to new consumer privacy laws is crucial. Modern MMM (such as OptiMine) doesn’t use any PII, cookies, or consumer tracking EVER, making it 100% risk-free.



Disadvantages of Traditional Marketing Mix Modeling


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Traditional Marketing Mix Modeling comes with quite a few downfalls:



High Cost.


Traditional MMM eats up a significant percentage of marketing/analytics budget(s). There is a reason that only the largest brands in the world have used MMM in the past– they can afford to cover these significant expenses as part of their large marketing and analytics budgets.



Slow Speed.


Because Traditional MMM uses a manual consulting exercise, building models or changing them over time takes a significant amount of time. It is common for brands using Traditional Marketing Mix Modeling to get the measures many months after the period being measured.





New data, business questions, KPIs and outcomes are all part of the real-world facing marketers and brands. These factors present challenges to Traditional Media Mix Models because they all represent more manual changes, tasks, time and new costs. As a result, many deployments are highly static and don’t change much because brands don’t have the resources to evolve the models over time.



Not Actionable.


Nearly all Marketing Mix Models use highly summarized data typically rolled up by week or by month. And because the models are built using highly manual efforts, it is nearly impossible to get deeply detailed guidance from MMM measures. As such, teams get very high-level recommendations that are frequently difficult to execute with precision. This is an even bigger issue within digital marketing channels that frequently have hundreds or thousands of different campaigns, targeting elements and execution approaches, all with very different performance characteristics. These important nuances are missed completely with Traditional MMM models.




Future-Proof Your Marketing Measurement


Modern MMM will set brands up for future success in the privacy-first world we now live in, because it is fully future-proof. Unlike identity-based measurement systems, Modern Marketing Mix Modeling is not powered by user-level data. Instead, Modern MMM uses aggregated data from a range of variables and channels to examine marketing effects without tracking users.


Modern MMM is the Right Approach for Today… and Tomorrow!


Privacy regulations will continue to change, and Modern MMM provides a stable measurement tool unchanged by fluctuations in data availability, making this methodology the most resilient to privacy changes.








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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