Marketing Mix Models(MMM) can be deployed to improve the efficiency of the entire gamut of marketing inputs such as price, advertising, promotions and product introductions. By estimating the impact of these inputs with time series data, the complex input- output relationships in marketing can be revealed, helping managers take informed data based decisions.
A top FMCG brand in the food space felt that rather than continue with business as usual and setting budgets and marketing costs on historical understanding, they would like to use their data assets to improve the effectiveness of marketing spends, both ATL and BTL. Given that this brand operates in a large number of markets, with regional differences, the task was to build models at a market level with all key inputs that drives their sales. Over 14 different Marketing Mix Models(MMM) were built and the final recommendation was to change the ATL/BTL mix in ATLs favour, focus on growth markets where the ROI was more robust and also suggested a mix of different sub- brands by market.
Specifically, while spend was reduced on BTL, most of the cuts were made in the activities that were either not working or returning a very poor ROI. This meant that the reduction in sales from the axed BTL activities was minimal and in some cases, there was zero reduction as these activities were actually redundant. The money thus saved was redeployed into much more effective channels including TV advertising, which had been neglected to an extent. Specific media plans were suggested for the mother brand and the sub-brand ensuring that spends are above the threshold level – and this lead to more visibility for the campaigns and ahigh uptick in sales. The media recommendation also suggested specific TV channels to be used and also the scheduling of spends.
The net result was a high growth in sales – more than double that of earlier years – all achieved without a change in budgets. Marketing mix modeling can also be used to drill down at a more granular level – for example – different genres in TV such as news, sports or general entertainment, leading to a further sharpening of media strategy. Now MMM is de-rigour for brands in the B2C space, looking at marketing their wares in an increasing competitive and complex markets.
.jpg)
The sole purpose of advertising is to sell products. It has no other purpose. David Ogilvy, who must have himself won many awards at the Cannes said - "If it doesn't sell, it isn't creative".
.jpg)
Marketing is the art of predicting the future and hoping your target audience agrees. While time series analysis is the science of trying to make sense of a chaotic past. Together they form a love-hate relationship as complex as a Rubik's cube on a rollercoaster. So, buckle up marketers, because we are diving into the world of time series and market mix modelling.
Whether you are a brick & mortar retail chain or one who sells off a website, it is mighty important to know, from which geography your customers come from.