Market Mix Modelling (MMM) is enjoying its moment in the sun, but there are implications to its newfound popularity. Paul Sinkinson, managing director (ANZ) at Analytic Partners, highlights how the need for speed is overshadowing MMM’s true benefit – improving a business’ ROI.
Modern marketing is obsessed with speed. It’s all about getting data faster, making decisions quicker, being agile, nimble, or any combination of those words we like to throw about. But here’s a thing we’ve all learned from an ad campaign: speed kills.
In marketing measurement, it kills your campaigns and then your ROI.
Take MMM. It’s the latest buzzword, with everyone raving about its real-time capabilities. The last 12 months have been marked with a tremendous amount of fanfare and press dedicated to this measurement technique, largely due to the increasing importance we’re putting on getting data faster than ever.
But in our rush to get instant results, are we forgetting what really matters? MMM’s real value lies in driving long-term growth and ROI, not in spitting out data to help you optimise channels in the moment.
MMM, for those who may not know, is a measurement analysis strategy that examines the impact of various marketing techniques on sales. In other words, it’s a tool to understand what your marketing team is doing that is actually making your company money.
For a long time, that’s what MMM did – providing businesses with a deep understanding of what in their marketing mix is actually delivering them results and optimising for the business’ long-term strategy. And in many ways, the heightened focus on MMM has been positive, as more attention means more investment and greater development of the technology.
However, this surge in interest has also led to some misunderstandings, particularly around the concept of real-time measurement. To paraphrase David Abbott: “Junk that arrives at the speed of light is still junk”.
Making MMM faster and more granular is one thing. The promise of real-time, or daily, results is another. The concept of real-time measurement is alluring, with claims that it can revolutionise decision-making and improve outcomes.
But let’s pause for a moment. The true value of any measurement model should lie in its ability to enhance business performance and drive growth, not merely in its speed. But it seems to have become the case that speed is what people want from their MMM programs, and not whether it can provide your business with better results and growth.
This wouldn’t necessarily matter if not for the fact we’ve seen a lack of evidence on how new models boasting real-time capabilities have actually tangibly improved ROI. The essence of an optimisation program is to enhance performance, not just provide faster reporting.
Unfortunately, the excitement around real-time data has led to the creation of passive tools, such as dashboards, which track metrics but don’t actively drive change.
In Australia, where marketing teams tend to run leaner than our overseas counterparts, this issue is even more pronounced. Without dedicated analysts, these tools often end up as under-utilised resources, or worse still tools for marketers to be beaten with when performance doesn’t improve.
To genuinely improve performance businesses need a comprehensive measurement program. This goes beyond passive tools; it means you need people who are enabled by technology.
This human element is crucial for driving real results and ensuring that data insights are effectively integrated into planning and creative processes. From our experience, the best insights come from the gaps and anomalies which appear in the data. It’s only by having this skilled team that businesses will be able to turn their results into growth from the business.
Interestingly, as the marketing industry matures, there’s emerging evidence that ROI is actually improving – but it’s not because of what you think.
At Cannes Lions last year a presentation titled “The Third Age of Effectiveness” highlighted how marketers, with better understanding and tools, are achieving superior outcomes. This shift indicates a move away from purely performance-driven metrics to a more balanced approach, meaning insights can be integrated across various channels.
That is not to say fast results are all useless – they can be very valuable in digital channels like search, where real-time data can be crucial. However, it’s important to use this data appropriately to optimise within channels, rather than using it solely to allocate budgets across the various channels in your marketing mix.
It’s also important to understand that real-time actually does need to be real-time for it to be effective – daily is too late when it comes to optimising in most digital channels, merely telling you where you underperformed on that day with that algorithmic setup.
Most of all, it’s crucial to understand that the true aim of MMM is, and always has been, is to improve ROI. No matter how fast, flashy, or AI-heavy your MMM is, that’s the only thing that matters.
At Analytic Partners, we’ve spent over two decades helping clients enhance their marketing performance, consistently achieving an average improvement of 30 per cent. Our work with brands like McDonald’s, which saw a doubling of ROI over five years, and our award-winning projects, such as Arnott’s Effie for ROI, demonstrate the power of a well-rounded measurement approach.
This is a good time for those in the MMM space, but we should be cautious not to let the excitement of what our technology can offer detract from what MMM is actually meant to do. We should prioritise programs that genuinely enhance business performance, especially in times of tighter budgets where every dollar must work harder.
By focusing on the ROI these models give us, rather than the allure of speediness, we can ensure MMM can continue to deliver the substantial benefits it promises.
