The elevator pitch

Marketing Mix Modeling (MMM) is a powerful method for identifying which elements of your marketing strategy drive the highest sales and profits.

🔍 Identify key drivers
For example, if you’re using TikTok ads, email newsletters, and podcast sponsorships, MMM can show that while TikTok ads attract a lot of attention, it’s the email newsletters that actually drive the most purchases. This helps you allocate your budget more effectively.

📈 Clarify sales spikes
MMM also helps clarify whether observed sales spikes are due to specific marketing activities or just coincidences. For instance, if sales increase after a podcast sponsorship, MMM can determine if the sponsorship truly caused the increase or if it was merely a coincidence.

🔮 Predict future outcomes
MMM not only evaluates past performance but also predicts future outcomes. This helps you understand if your current strategy will lead you in the right direction and allows you to adjust your tactics proactively.

🧩 Accurate interpretation
Though MMM offers valuable insights, it can be complex and require careful interpretation. Proper analysis ensures you avoid misinterpreting the data and making costly decisions.

Why MMM is essential for effective marketing

Smart budgeting
MMM shows which marketing channels drive the most sales. For instance, if you’re using TikTok ads, email newsletters, and billboards, MMM might reveal that billboards bring in the most foot traffic and sales. This insight helps you allocate your budget more effectively, investing more in high-impact areas.

Clear insights
MMM helps you understand what really drives sales. For example, if sales increase after a marketing push, MMM can pinpoint whether the boost came from billboards, TikTok ads, or email offers, giving you a clear view of what’s working best.

Privacy-friendly
MMM respects privacy by analyzing overall trends rather than tracking individual customers. It looks at how different marketing efforts, like billboards and digital ads, influence total sales without monitoring specific individuals.

How to reveal causality over correlation?

Understanding causality and correlation differences is crucial for making smart marketing decisions. Many people mistakenly think that if two things happen together, one must be causing the other. However, this isn’t always true. Marketing Mix Modeling (MMM) helps you go beyond surface-level connections to see how your marketing activities directly influence your sales.

Causality
Imagine you’re running TikTok ads, sending out email newsletters, and putting up billboards. MMM can isolate how each of these activities specifically impacts your sales. For example, it might show that billboards drive people into stores, directly boosting sales rather than just being associated with increased traffic.

Correlation
The correlation only shows that two things move together, like noticing that your outdoor ads and online sales peak in the same month. MMM digs deeper to uncover the true causes. It might reveal that while both seem connected, a special promotion running that month is the real driver, not the outdoor ads.

Example: Let’s say you notice that every time ice cream sales go up, so do sunglasses sales. They’re correlated, but one doesn’t cause the other. The real cause is the sunny weather—when it’s sunny, people are more likely to buy ice cream and sunglasses.

MMM would help you identify that sunny weather (an external factor) is driving both rather than incorrectly concluding that selling more ice cream leads to more sunglasses sales.

In short, MMM ensures you understand which of your marketing efforts are making a difference, helping you invest wisely and avoid chasing after false connections.

What are the key steps in MMM?

Set (measurable) goals
Define what you want to achieve, such as increasing sales or boosting profits.

Example: If your goal is to increase sales by 20% this quarter, that’s your target.

Identify what affects your results
Determine factors impacting your sales and profits, including all marketing channels and external elements.

Example: Evaluate how TikTok ads, email newsletters, and outdoor campaigns impact sales, and consider external factors like holidays.

Collect data and build your dataset
Gather detailed historical data on sales, marketing activities, and external factors. Structure this data to understand its impact on sales and incremental effects.

Example: Collect daily sales figures, ad spend data, and information on holiday periods over the past two years.

Analyse and build your data-driven model
Use statistical methods to examine how various factors influence your sales and profits, ensuring that both digital and offline channels are evaluated equally.

Example: Analyze how digital ads and offline promotions like billboards impact sales, focusing on incremental sales—how much additional sales each marketing activity generates.

Test and refine your model
Continuously test and update your model with new data to ensure accuracy and reliability.

Example: Validate predictions by comparing them with actual sales data and adjust your model to better reflect real-world performance.

Analyse results
Review the data to identify which marketing activities and external factors are most effective at driving incremental sales.

Example: Discover that email newsletters and TikTok ads contribute more to incremental sales than other channels.

Optimise your marketing spend
Adjust your budget based on the insights gained, investing more in high-performing channels and refining your strategy.

Example: Allocate a larger budget to TikTok ads and email campaigns during specific times based on their incremental sales impact.

Putting it all together
By following these steps, you can effectively use MMM to optimize your marketing efforts. All channels, both digital and offline, are assessed equally to identify their true impact on incremental sales. For instance, you may find that TikTok ads and email campaigns significantly boost incremental sales during specific periods, allowing you to allocate your budget more effectively and refine your

Why combine MMM with evidence-based research?

Pairing Marketing Mix Modeling (MMM) with evidence-based research provides a powerful strategy for driving both short-term gains and long-term success. This combination allows you to refine your marketing efforts with a clear, data-driven approach while ensuring that your brand remains strong and competitive over time.

Expanding brand reach for long-term growth
Byron Sharp and the Ehrenberg-Bass Institute emphasise that brands grow by reaching as many people as possible. MMM helps you identify the most effective ways to extend your reach, ensuring your brand stays top of mind and attracts new customers.

Balancing immediate impact with long-term strength
Les Binet and Peter Field’s research underscores the importance of combining short-term sales activations with long-term brand-building efforts. While MMM optimises your immediate marketing activities, integrating these insights ensures you’re also laying the groundwork for sustained brand health and profitability.

By merging MMM with these proven principles, you create a strategy that doesn’t just chase quick wins but builds a robust foundation for future growth. This approach helps you maximise today’s marketing effectiveness while securing your brand’s place in the market for years to come.

How can the PACE framework optimise your marketing strategy?

To maximise the effectiveness of each marketing channel, whether online or offline, we’ve developed the PACE framework: Persist, Accelerate, Change, Exit. This framework helps you make the most of your marketing investments by strategically adjusting your approach. It’s designed to allocate the best investment levels and enhance the conditions for each media channel.

Here’s how PACE can transform your marketing strategy:

Persist
Keep investing in channels that deliver strong results. For example, if your email newsletters consistently drive conversions, maintain or even increase your budget for these campaigns to sustain their success.

Accelerate
Increase investment in high-performing areas. If TikTok ads generate impressive engagement and sales, consider ramping up your budget to amplify these gains.

Change
Modify or experiment with strategies that aren’t meeting expectations. For instance, tweak the approach or test new tactics to improve its effectiveness if an outdoor campaign isn't performing as hoped.

Exit
Reduce or eliminate spending on underperforming channels. If podcast sponsorships fail to deliver the expected ROI, reduce this investment and reallocate those resources to more successful channels.

By applying the PACE framework, you ensure that your marketing efforts are well-funded and continuously optimised for better results.

Would you be ready to make your marketing more effective?

Want to see how Marketing Mix Modeling can transform your marketing strategy and drive better results? Contact us for a consultation. Discover how our advanced analytics and evidence-based research can help you achieve both short-term success and long-term growth.