by Michael Wolfe
The increased interest in Marketing Mix Modeling is becoming evident in light of today’s limited budgets and the demand for every advertising dollar to impart a direct profit. Termed MMM, this is a statistical approach to measuring the impact of marketing activities on present and future sales. Correlating each element of the marketing mix with its contribution in sales volume is instrumental in determining marketing effectiveness on the whole. To this end marketing mix modeling is used for marketing measurement and spend optimization.
Marketing Mix Modeling’s Role in Increasing Marketing Effectiveness
The marketing mix may seem straightforward; however, its direct effect on Marketing effectiveness can be staggering. There is a delicate balance between the elements of the marketing mix and product success. The slightest disparity can take a dramatic toll on advertising effectiveness with far-reaching externalities on the marketing ROI.
As the old saying goes, “Your wasting half of your marketing dollars; unfortunately you don’t know which half.”
Marketing Mix Modeling: an Insatiable Role in Advertising Returns
Besides the obvious advantages of marketing mix modeling and its pivotal role in marketing effectiveness and strong advertising returns, marketing measurement quickly accelerates the curve of organizational learning for strategic advantage and an unwavering level of competitiveness today.
Whereas businesses with large budgets apply the shotgun approach (involving trial and error) with marketing dollars, it is shown that even small businesses can achieve the same success by focusing on laser targeted campaigns that produce sure-fire results.