In today's rapidly evolving and highly-competitive business environments, marketers are under more pressure than ever to optimize their marketing performance and drive business growth. That's where Self-Service Marketing Mix Modeling comes in as your problem solver. But let us start with the basics first and understand what Marketing Mix Modeling is before we dive into Self-Service Marketing Mix Modeling.
Marketing Mix Modeling is a statistical analysis method that determines the effectiveness of marketing activities and helps to optimize the allocation of marketing resources across channels, tactics, and/or campaigns. It quantifies the Return on Investment (ROI) for each marketing activity and recommends how to increase it.
Self-Service Marketing Mix Modeling takes this process one step further by empowering marketers to perform analyses themselves, using intuitive and easy-to-use Software-as-a-Service (SaaS) solutions. It enables marketers to evaluate the effectiveness of each marketing activity and compare them whenever needed.
In this article, we will answer the following questions:
The marketing landscape is becoming increasingly complex: With the rise of digital marketing, marketers have access to tons of data and a whole bunch of analytics tools, which can help them to better understand their customers and improve their marketing performance. However, this overwhelming availability of data and tools can be difficult for marketers to master and use effectively. This is where Self-Service Marketing Mix Modeling comes in - it empowers marketers to focus on the relevant data, train highly accurate statistical models that find out the important patterns, and derive outcomes like Contribution, Return on Investment, Ad Stock Effects, and Saturation Curves.
Demand for more accountability and transparency: In today's data-driven world, stakeholders expect marketers to be able to measure and report on the impact of their marketing efforts with a high degree of accuracy and transparency. Self-Service Marketing Mix Modeling enables marketers to validate their own data and measure the impact of their marketing activities more effectively, which helps to build trust and credibility within an organization and for external stakeholders.
Need for fast insights and flexibility: Traditional Full-Service Marketing Mix Modeling can be time-consuming and expensive, and it may not provide the flexibility and agility that marketers need to act in fast-changing environments. Self-Service Marketing Mix Modeling empowers marketers to run MMM on demand when needed with high efficiency because everything needed can be bundled in the marketing department without external dependencies.
Self-service MMM platforms are designed to be user-friendly and intuitive, even for non-technical users, with drag-and-drop interfaces, easy-to-understand data visualization as well as built-in guidance and support.
It empowers marketers to become more data-driven and agile, by enabling them to run their own marketing mix modelings without relying on externals and to build a deep understanding of the root causes of their marketing performance themselves. This helps marketers to make faster, more informed decisions about their marketing activities and to optimize their marketing performance more effectively.
Platform Setup & Configuration: Although vendors provide their solutions as Software-as-Service nowadays to speed up processes, some work still has to be done in advance, like spinning up a client-specific environment with resources attached, defining roles and authorizations as well as providing initial access for each user.
Onboarding & Support: If users work with the solution for the first time good vendors provide an onboarding procedure & ongoing support afterward to get users up to speed. Depending on the vendor, onboarding procedures can have completely different formats ranging from classical onboarding sessions with an instructor to complete self-learning based on onboarding guides and/or videos.
Creation and provisioning of modeling dataset: Either the vendors or the marketers themselves create a modeling dataset, which combines the relevant data for the target KPI and the explanatory factors. The modeling dataset will be made available within the Self-Service Marketing Mix Modeling Software, so everything is ready for model training.
Functional Tests and Feature Engineering: After a modeling dataset is made available in the software a few test runs will be performed, to make sure that the model training works and that all factors as well as target KPIs can be used for the model training. On top factors can be transformed (e.g. normalized, inverted, indexed) so that they are more readable for MMM algorithms.
Model training & Result Interpretation: Via the software, marketers are enabled to train different models themselves by e.g. changing the set of explanatory factors that are used for the model training or even changing the target KPI. Via these iterations of model training and interpreting the results, marketers develop a good understanding of the importance of each factor and also the media variables themselves.
Model Selection, Insights Creation & Optimization: With a good understanding of each factor and the media variables, marketers can choose their favorite model and use it for optimized budget allocations in order to increase efficiency for future marketing investments (e.g. next campaign, next years allocation)
Process management: The Self-Service MMM project has to be managed like every other project in order to make sure that expectations are fulfilled, deliverables are on time, and project goals are set and reached in the end.
Decision-Making & Operationalization: Good solutions also provide possibilities to use the created insights for briefings and/or setting tactical as well as strategic goals.
Marketers that have all crucial capabilities e.g. for the dataset creation or have them in-house available can perform nearly all steps themselves. Only the first two steps “Platform Setup & Configuration” plus “Onboarding & Support” are always done by the vendors. Here is an overview of which ways of working make sense depending on the capabilities and resources available in-house.