Optimise your marketing budget for 2024 with Marketing Mix Modelling (MMM)

Date
18 August 2023

At iO, we get to support a lot of national and international organisations in the area of digital marketing. One of the tools we use to allocate marketing budgets as efficiently as possible is Marketing Mix Modelling (MMM). While this may sound new and unfamiliar to the ears, it's a technique that has been used as early as the 1980s and 1990s to clarify the impact of marketing spending on sales. But what exactly does MMM entail and why is it so essential when planning marketing budgets for 2024?

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Marketing Mix Modelling: more results with the same budget

Alright: optimising marketing budgets, sounds good. But what exactly is Marketing Mix Modelling? MMM is an analytical approach to quantify the impact of different marketing channels on conversions (e.g. revenue and sales).

Using machine learning models, MMM determines how various marketing expenses contribute to your business goals — and what you can do to optimally distribute those expenses. This gives you insight into which marketing activities work best and which channels provide optimal returns.

In other words: if you use paid media in your marketing campaigns, MMM is highly relevant. It helps you make data-driven decisions without having to manually dig into the data yourself. By analysing the performance of different channels and activities with the help of a model, you can allocate and optimise your budgets even better in the future.

As the cherry on top, MMM also gives you insight into the synergy between different channels. Or: you get a better understanding of how all channels interact and can reinforce each other.

Marketing Mix Modelling in a changing marketing landscape

The world of marketing is changing every day. We (rightly) need to be increasingly careful with data, the third-party cookie is being phased out, and internet users want more transparency and control. Marketing Mix Modelling is also incredibly relevant in that context: 

  1. Reduced reliance on cookies — MMM offers a solution that does not rely on individual user data because it uses aggregated data. This gives marketers insight into the overall performance of their marketing mix, without having to track individual users. 

  2. Analysis of online and offline channels — MMM integrates various online and offline channels. Online ads and tracking may face limitations, but offline channels such as television, radio, and print remain relevant for many organisations and are more difficult to measure. With MMM, marketers measure the impact of all marketing activities without worry and better understand how they influence each other. 

  3. Focus on context and creative — As the use of personal data is restricted, the context in which ads are displayed — and their creative quality — becomes increasingly important. MMM helps marketers understand the contextual factors and creative elements that contribute to the success of their marketing campaigns. With this additional information, they can allocate their budgets more strategically to the most relevant channels. 

Let's get started with Marketing Mix Modelling. 

At iO, we deliver high-quality MMM support to turn our clients' digital marketing efforts into a real success story.

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Use Marketing Mix Modelling to allocate your marketing budgets for 2024

When you're planning your marketing budget for the coming year, you should always make sure it's well-founded and that resources are optimised. In that process, Marketing Mix Modelling plays an essential role — as it provides concrete data and insights to make informed decisions. 

MMM uses historical data to discover trends and patterns in the performance of your marketing mix — and to sharpen it up in the future where possible. This way, you know faster and more accurately than ever which tactics and channels have the biggest impact on your sales. 

In the complex world of online marketing, Marketing Mix Modelling is a valuable tool that can make marketers' lives easier. By identifying trends, improving weaknesses, and responding to changing consumer behaviour, organisations across industries can gain and maintain an edge in a competitive market and maximise their growth potential. In other words, never again make budget plans based on gut feeling, but instead make informed decisions. 

Whitepaper: 15 tips to make your marketing and digitisation budget for 2024 smarter

Checklist: 15 tips to make your marketing and digitisation budget for 2024 smarter

Now that you have a better idea of which benchmarks are the norm in terms of marketing budgets, and budget distributions, it's time to roll up your sleeves and get to work. We are here to help you with that too. Download our checklist with "15 tips to make your marketing and digitisation budget for 2024 smarter". This checklist with an inventory of cost items and templates that you can use, you’ll be off to a flying start.

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