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Marketing mix modelling(MMM) is an analytical approach to optimize marketing efforts. It quantifies the impact of various marketing inputs,such as product features, pricing strategies, distribution channels,promotional activities, competition activity, and environmental factors, to maximize return on marketing investment ( ROMI ).
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From a B2B perspective, analytics avoids the traditional 'spray and pray' approach of engaging different potential customers with a variety of products.
Many brands still depend only on media planning based on survey data ( BARC, Adex etc) and while this served the purpose about 20 years ago, in today’s scenario it is simply not good enough. Let me point out some deficiencies in the existing media planning process. For one even if the eyeballs estimated are correct, this does not mean that the “right” eyeballs are being targeted.
In conclusion, today’s brands especially the digital new age brands need to start building connects with the customer, beyond the transactional and also start looking at more robust brand building processes, irrespective of the media used.
The ROI attribution that was done for digital advertising was never anywhere near perfect. The main issue was that it attributed “credit” based on various algorithms, each of which had its own share of problems. More importantly it had the issue of last mile attribution. Since people may have checked out a brand and then bought it online, all credit was given to digital advertising.
There seem to be many large brands that are spending too little on advertising, eventually leading to a weakening of the brand and its ability sell and command a premium. Take for instance Tanishq, a leader in the fine jewellery space with over 20 k cr in turnover, it is all but invisible on mass media. Sure, it is a fast growing brand, but is it actually taking full advantage of its strengths and the headroom in the industry? Probably not.
Data science offers a more precise guide – computing the price elasticity at a key SKU level can suddenly make this exercise a lot easier. While we still use judgement and intuition, now our gut is better informed and therefore the decisions are much better as they are based on hard data.