Marketers struggle to prove how their marketing activities drive business outcomes. Despite the huge technological and modelling advancements, marketing measurement is increasingly limited due to privacy regulations and user tracking restrictions on the web. As the data input transforms and less user-level data is available, the industry turns back to MMM. However, this shift often misses the granularity granted by MTA.
Objective Platform was able to overcome this lack of granularity by taking MMM to the next level. We created a Next-Gen Marketing Mix Modelling software that implements practices coming from MTA, measurements on both channel and campaign level, and business knowledge. We call this the Holistic Marketing Model (HMM). And although it is not a direct substitute for MTA, it still supports a good deal of granularity, which seems to crumble with the rise of cookie-less web restrictions. Our holistic approach steps up in 4 major points compared to traditional MMM. This article explains the next-generation Marketing Mix Modelling step by step. Keep reading to find out why these steps are necessary for your performance marketing.
1. Use Marketing Mix Modelling to measure media effect based on a combination of media and non-media factors
Traditional MMM measures only media factors. On the other hand, in HMM, the media effect is measured based on a combination of media and non-media factors. Modern performance marketing calls for measurements that include both media and non-media dynamics that might influence your KPIs. There is much proof that omitting important variables may lead to significantly inaccurate media estimates. HMM seeks to avoid this variable exclusion and shifts from mere media modelling to a holistic source of truth that incorporates all relevant factors of influence. This holistic approach aims to provide a better understanding of your actual business dynamics. Once you have these figured out, you can proceed to a more informed strategy and action planning.
2. Add a media hierarchy that allows for more granularity and sophistication in an MMM set-up
Typically, you would use MMM to attribute value on channel level. And sometimes split variables to include more details. However, when these models are used to answer more complicated business questions, there is an elevated risk of overfitting the model by adding too many variables. In other words, you tackle one problem, and you create another one. Objective Platform answers this dilemma by incorporating a media hierarchy method into our holistic marketing model. In short, this technique teaches the model the relation between campaigns, channels, and communication goals. This makes your model smarter by the day and contributes to more sophisticated decision making.
3. Blend prior business knowledge and experiment outcomes into your MMM with Bayesian statistics
For a series of reasons, organisations struggle with data acquisition and might end up with a poor dataset to work with. HMM, based on Bayesian modelling, combines past business knowledge and experiments to make up for the limited data availability. For each variable, we define and configure prior distributions which inform the model on the expected outcome. Simply put, by inserting your business knowledge and past performance into our modelling, we produce a reliable forecast for your future marketing activities. The information we have so far proves that setting priors formulates a blend between past performance evidence and sensible business outcomes. In a way, our holistic model is tailor-made for your business and adjusts throughout operations. Therefore, you can predict the performance of your marketing activities even with a limited dataset.
4. Automate data and modelling for time efficiency and accessibility
Modern-day performance marketing calls for automation and standardisation, especially when it comes to Marketing Mix Modelling. HMM sets an innovative approach, where results are presented to your organisation more frequently and in a standardized layout so you can access the information faster and make real-time decisions if needed. HMM through automated data collection achieves faster results delivered in the form of dashboards. This innovation offers easier access and saves you time in repetitive tasks compared to traditional MMM. Hence, you have more time for decision making and action.
Why does your company need the Holistic Marketing Model?
Next-gen methods become a necessity in this privacy-first world and the market shifts progressively towards Next-Gen MMM. By implementing HMM, as developed by Objective Platform, you are able to adapt your marketing measurement to a more sustainable reality. Instead of solely relying on traditional MMM, you can benefit from the granularity and detailed insights offered by our holistic model. Indeed, HMM steps up from traditional MMM by incorporating elements of MTA and past business knowledge to offer you a holistic solution tailor-made to your business objectives. Shift to
- Measure your media effect based on both media and non-media factors.
- Gain extra granularity and minimize the risk of overfitting.
- Use your past knowledge to make up for limited data sets.
- Fit your model to your business and eliminate irrelevant results.
- Save time in repetitive tasks through automation and be able to make more real-time decisions without the interference of a third party.
Curious to know more about our solution. You can read our Next-gen Marketing Mix Modelling case studies?