In today’s landscape, marketing plays a very important role in the success of any company, corporation, or brand. With thousands of brands competing in the same marketplace from all over the world, good marketing gives you an edge over your competitors and improves brand exposure to the general public. But how can you tell if a certain marketing strategy is working or not? Which factors are promoting or hindering sales of your product? The answer to this is Media mix modeling. Media mix modeling is a group of technologies and methods that are used to determine which marketing tactics had more impact on your sales which can then be used to improve your marketing strategies. This method was originally devised for consumer goods companies but has now been used by many brands across the globe. This article will go over important details regarding this model in a brief manner.
How does Media mix modeling work?
The basic procedure of Media mix modeling is to collect relevant data from a company’s marketing sources and then analyze said data. All the relevant factors that could affect the sales in any manner are collected and then data analysis is carried out using statistical methods. The weight for each factor is further quantified to develop a model that can be used to predict results for future marketing strategies. The methods factor in multiple aspects like ratings, sales, and online analytics. This allows companies to look at their marketing campaign in a much broader manner instead of just focusing on one thing. They measure the impact of each marketing tactic by quantifying sponsorships, ads, prices, and PR regardless of the channel involved. The models used for analysis usually vary from company to company due to differences in products.
Difference between Media mix modeling and attribution modeling?
Another model that is used by companies to keep track of their marketing and its potential results is attribution modeling or digital attribution. Both of these methods may sometimes be used in place of each other and may cause some unnecessary confusion. Media mix modeling is basically a tool that can be used to determine the influence of certain factors in improving marketing tactics to increase sales. The data analyzed and models generated to give an insight into how to better allocate budgets and how to use them to achieve your required goals. Attribution modeling, on the other hand, analyzes which touchpoints convert a user to a paying customer. Touchpoints refer to interaction with future customers like clicking on ads or comments on posts. This model helps a company determine when an individual becomes a full-time paying customer i.e. the act of conversion.
Limitations of Media mix modeling
The biggest limitation of Media mix modeling is that a lot of data and elements need to be taken into account before a reliable model can be generated. This may include a lot of factors like data regarding sales, price changes through years, expenditure on ads, data about competing brands (their products and marketing activities), etc. You also need to add seasonal data like sales during holidays or certain days of a week. The brand authority’s impact on marketing spend and proper attribution on individual media effectiveness should also be taken into account. Going over so many different metrics can influence the reliability of the eventually generated Media mix model.
Conclusion
Overall, Media mix modeling is an effective tool to determine which factors play a huge role in improving product sales. It provides companies with an effective model to change or improve certain marketing tactics. It allows companies to allocate budgets and spend them on marketing in a productive manner to reach their objectives.
