Media Mix Modeling

Media mix modeling (MMM) is a statistical analysis that utilizes aggregated data to measure a wide range of marketing activities to determine.

Media mix modeling, also known as marketing mix modeling or MMM, is a statistical method used to measure the impact of marketing and advertising campaigns.?

MMM reveals how the 4Ps of the marketing mix — product, price, place, and promotion — are contributing to a particular goal.?

For example, it can show you how elements like pricing, customer demographics, media spend, and external factors are affecting your sales volume, and predict what would happen if you made certain changes.?

MMM uses statistical analysis to explore how different marketing efforts affect business outcomes like sales. Using a technique called multi-linear regression analysis, it enables you to link independent variables (such as marketing spend on different channels or user engagement metrics) to a dependent variable (such as app downloads or revenue).?

The idea here is to evaluate multiple models to accurately answer the question: “What will happen if we make this change?”?

For example, you can use MMM to measure the impact of in-app ads on total revenue. Then you can look at the effect of increased spending on these ads: would it earn you more, or less??

To use MMM effectively, you need aggregated and cleansed data from internal databases and external sources. Ideally, your data will span two to three years to factor in effects like seasonality. Then, you assign a numerical value to every media channel campaign based on the return on investment (ROI), and use this to allocate future spend and create sales forecasts.