Marketing Mix Modelling
Harnessing data through MMM to optimise your P&L
What is Marketing Mix Modelling (MMM)?
Marketing measurement is currently undergoing significant change. For example, reliable digital attribution is no longer possible due to privacy interventions by Apple and restrictions on cookie availability.
Because of this, more and more brands are using Marketing Mix Modelling (also known as MMM or econometrics). It is a set of statistical analysis techniques applied to marketing or sales data to estimate the impact of various marketing activities. It is typically used to optimise the advertising mix and promotional tactics to increase ROI or incremental revenue.
In our experience, by not conducting MMM a great many brands are missing out on a significant opportunity to maximise their ROI and incremental turnover.
We will work with you directly or alongside your MMM supplier to ensure that you measure all media correctly and obtain as clear a picture as possible of how to optimise your spend.
How are we different?
- We are leading innovation in the MMM industry. To give our clients a competitive advantage we pioneer solutions to measurement challenges.
- For example, our new econometric solution Dynamic Marketing Mix Modelling (DMMM) is significantly faster and cheaper than traditional MMM techniques. It has been designed with digital and eCommerce focussed businesses in mind.
- We’ve led the reinvention of MMM for Out-of-Home media. Read the summary of our ground-breaking project ‘Maximising the impact of OOH’, which is changing how the entire OOH industry executes MMM.
- Independence. Entropy is self-owned, totally agnostic, and here to work as a trusted advisor to help you grow your business profitably.
- We have a unique hybrid business consultancy and MMM model. The diverse client-side, agency and data science experience in our team means we can get to grips with your business quickly. Our team has client-side experience from the likes of Argos, Unilever, Kellogg’s, American Express, Bupa and DTC brands that complements that of our econometricians to translate insights into clear and easy to understand recommendations to board level.
- Great value for money. We’ve low overheads, so can offer a much higher level of senior consultancy and day-to-day support at a lower cost than larger providers. This is important to really land the work. We will usually run a feasibility stage to any engagement, after which you can decide if you want to take the project further. This reduces the risk to you and means you can assess the initial outputs for a relatively small fee.
If you use OOH media it is essential you are aware of the Entropy MMM data standard
If you aren’t aware of the Entropy MMM data standard we are almost certain you’ll measure OOH performance incorrectly. We developed it working with all the stakeholders in the OOH industry in a project championed by the advertiser trade body ISBA. Read about the standard here.
Econometric model outputs provide clients with huge benefits including:
A detailed understanding of the key drivers of business performance to date and the relative contribution of each one.
- Sales uplifts and return on investment metrics for each individual marketing and sales investment lever.
- Price and promotional elasticities.
- Quantification of the inter-dependencies between investment levers. For example, does TV advertising drive online search?
- What is the optimal mix of media channels?
- Is there a synergistic effect when synchronising TV with in-store promotions?
Dynamic MMM: the faster, cheaper methodology revolutionising MMM
It’s designed specifically for digitally or digital commerce focussed brands.
It’s Dynamic MMM.
We’ve pioneered a new MMM methodology that we are rolling out to our clients. Basically, if you have a digital focus to your business, this is a key part of the way to accelerate profitable growth. It’s new to the market so we aren’t covering it here in detail. However, watch below as DTC brand Percival menswear discuss their experience of using it with us, and get in touch if you want to find out more.