Marketing Mix Modeling Isn’t What It Used To Be – Here’s Why You Need To Consider The Next Generation Of Modeling

There’s no doubt that marketing mix modeling (MMM) is having a moment. With the demise of the cookie and growing consumer privacy concerns, marketers are looking for alternatives to degrading multi-touch attribution (MTA) systems. However, as this moment unfolds, I have come to realize something fundamental: The understanding of marketing mix modeling solutions is woefully out of date. The industry is stuck in a time crunch, and marketers need to understand what has changed so they don’t settle for less.

Off the Table: A New Approach to Marketing Statistics

Traditional marketing mix modeling fails in business. Working with brands like Domino’s and Samsung, I’ve seen first-hand how the old consultant-driven approach with a six-month delay in results doesn’t allow businesses to make the right decisions. Yesterday’s marketing mix modeling was a clunky tool that left companies swimming in data but starving for insights.

If you’re looking at the marketing mix landscape today, you should consider the key characteristics that will enable the transition from insight to action and results: modeling methodology, granularity, data processing, accuracy, transparency and support. You are no longer looking for a table; you are looking for a growth co-pilot.

The Death of Custom Models: Embracing Flexibility

Let’s break down why the old ways are dying. The modeling methodology has fundamentally changed. Where regression once dominated, modern providers now use Bayesian techniques. But the development goes deeper than a mathematical approach to modeling.

The future of modeling is generalized and time-varying, not specific to one business at one point in time. Generalized models can change with the business and its context, so they are much less prone to overfitting. Overfitting is when one variable is highly correlated within a data set, but the observations have no real causal relevance, which is a high risk, especially when you have fewer observations that only exist in one particular context. Custom models that need to be rebuilt for each model run are a relic of the past.

Granularity: The Key to Practical Statistics

Granularity is where the real modeling magic happens. Marketers need high-level numbers for C-suite discussions, but they also need performance statistics across geographies, campaigns and time frames. They must assess the impact of pricing, promotion and brand equity. Gone are the days of static PowerPoint presentations where it was impossible to discover data beyond the top line result.

From months to minutes: the data revolution

Data preparation, one of the monthly nightmares, can now be done in minutes. Each next-generation MMM provider will offer automation through APIs for digital channels. But what about everything else? Modern marketers need solutions that allow them to clean and structure data from linear TV and out-of-home channels with just a few clicks.

Transparency: No longer optional

How much can you really trust your model? The gold standard is endurance testing. If your supplier isn’t performing and sharing these tests, it’s time to ask why.

AI: Not just for creatives

Here’s something that might surprise you: Generative AI isn’t just for creative departments. Other mar tech stack companies (such as Salesforce or Microsoft) have built generative AI tools that help customers instantly query their models, from media plan adjustments to on-board messaging.

Marketing mix modeling has evolved from a necessary evil to an exciting opportunity for businesses to truly understand their marketing impact. But businesses today cannot be satisfied with a PowerPoint presentation delivered in six months.

When we pioneered our next-generation marketing mix modeling methodology, we weren’t just creating another software solution; we thought about how businesses understand their marketing impact. That’s why we connect marketing efforts with financial results. Our practical insights that optimize ROI are how we differentiate our technology from yesterday’s MMMs.

There’s never been a better time to explore next-generation solutions. The future of marketing measurement is more powerful, transparent and accessible than ever before.