Optimise your marketing budget for 2024 with Marketing Mix Modelling (MMM)
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?
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:
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.
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.
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.
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.
Related insights on budget determination
- We’ve all noticed that in the dynamic world of marketing data, traditional attribution models are less and less relevant. Changes in technology and legislation mean that we have to look for alternatives. Modelling of marketing data is playing an increasingly prominent role and is becoming more accessible to organisations. Marketing Mix Modelling offers you unique insights into channels that are increasingly difficult to predict in a cookieless world. Find out all about it in this webinar.Read more
Get more insights into the effectiveness of media with Marketing Mix ModellingDigital marketing offers enormous opportunities in the field of data-driven working. We often fail to take advantage of these opportunities. That's means you miss out on a lot of opportunities to maximise the impact of your budget.Read more
15 tips to make your marketing and digitisation budget for 2024 smarterThe 2023 summer holidays are behind us and it's time for organisations to set their budgets for 2024. And that is often a more difficult task than we would like to admit.Read more
Balancing your budget between brand building and performance marketing has never been more importantIn our work with clients we see that there’s an increasing focus on effective, goal-oriented marketing communications. Data dashboards that show ‘more conversions’ and ‘more sales’ at a glance are preferred when reporting to the boardroom. But this carries a risk too. It might be a good time for brand managers to ask themselves: are the most obvious tactics also the most impactful ones?Read more
Data & Intelligence: removing emotion from the boardroomData has been vital for some time now in demonstrating whether a marketing and sales strategy is a hit or a miss. However, the discussion is still dominated by gut feeling when analysing why strategies fail and what needs to be radically changed. By removing emotion from the boardroom, we raise marketing and sales efficiency. In the past, marketing strategies were based on what had already happened. Today, we have a high degree of predictability. Digital marketing has never been so close to certainty.Read more
7 essential insights to help you determine your marketing budget for 2024In the ever-changing world of marketing, it can be challenging for CMOs to determine the correct marketing budget. The economic landscape and technological advances in the marketing industry calls for a new approach to budgeting.Read more
Opinion article: Will our marketing plans ever be free of the 'gamble'?Summer is slowly changing into autumn, the annual cue for the opening of the "budget season." Time to fire up the roulette wheel; redistribute marketing investments on gut feel, driven by the resources provided by management. Or are you doing it differently this year?Read more
Dossier: Successful marketing budgets and plans in 2024Read more
Steven Van Belleghem: The cost of poor 'Customer Experience' is frequently underestimated.Companies are unaware of the enormous the cost of bad customer experiences. Out-of-pocket costs such as customer service are being pushed up, at a time when it’s becoming more difficult and expensive to find new customers.And this is happening while the brand credibility is declining and there is erosion in terms of new business development.Read more