by Michael Wolfe
One of the core focal points of our company and this website is marketing-mix modeling. We contend that marketing-mix modeling is the “gold-standard of marketing ROI measurement” because it has the capability to measure all marketing programs at one time. As powerful as this seems, there appears to be more excitement among marketers toward managing the business with metrics, KPI’s and marketing dashboards. This clearly seems sexier because it is more like Captain Midnight manipulating his rocket controls to guide his rocket ship to earth. Seriously, even the best Key Performance Indicators are only indirect indicators of marketing and brand health. Measures like brand awareness, preference and purchase intent, while important, are imperfect predictors of real sales and customer acquisition. Still, it seems many executives prefer the popular but imperfect measures over direct and precise measures of marketing ROI. Perhaps marketing mix modeling suffers from its own awareness problem or maybe executives simply do not understand it? Perhaps this is what R.E.D. Woolsey meant when he said: “People would rather live with a problem they cannot solve than accept a solution they cannot understand”? Send me a note on your thoughts.