Boards and the C-suite are expecting CMOs to deliver profitable growth in 2023 despite various macroeconomic pressures manifesting into the “triple squeeze,” making everything more expensive. Although marketing budgets rebounded last year to more than 9%, according to the 2022 Gartner CMO Spend and Strategy Survey, they are still lower than 2020, forcing CMOs to achieve more with less. To prove the value of marketing, smart CMOs are turning to marketing mix modeling (MMM).
MMM is a technique used to measure the impact of advertising and promotions across channels while controlling for external factors outside of a brand’s control, such as inflation or consumer sentiment. It’s used as a scorekeeper to show the overall incremental impact of marketing investments, a forecaster to predict the outcome of raising or lowering marketing budgets, and a coach to suggest shifts to current marketing investments that improve performance. MMM is also used to measure the financials of brand investments, and can provide monthly updates on brand metrics that are useful for filling in the gaps of less-frequent brand-tracking surveys.
To get the most out of MMM, it’s important to prioritize insight objectives, make sure the outputs inform adjustments to marketing activities, and take advantage of scenario planning, optimization, and simulation opportunities. Asking key stakeholders to assemble and discuss at least one improvement to focus on prioritization, validation, or optimization of existing efforts is also essential. With MMM, CMOs can prove the value of their marketing efforts, helping their organisations achieve profitable growth in 2023.
Originally reported by Martech: https://martech.org/marketing-mix-modeling-a-marketers-guide/
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