The importance and complexity of finding the appropriate answer to the age-old dilemma of "how can I invest my budget?" has become more complex these days. For many years, brands have struggled to quantify the factors that affect business performance, including correctly attributing the effect of marketing expenditure with billions of dollars on the line and consumers buying across platforms and media channels. In order to give advertisers, the assurance they are making the best investment decision, Arrow Point offers a right solution through Marketing Mix Modeling (MMM).
Advanced measuring techniques are employed by Arrow Point to analyze and quantify the performance of each component of the marketing mix. Through Media Mix Modeling, which includes additional layers like branding, campaigning, touch-point analytics, customer analytics, and operational analytics, we go one step further and address the entire business at a deeper, more granular level. To meet certain market, brand, and commercial challenges, we customize each model. We use media mix models to better understand the underlying reasons of performance and uncover performance factors. Compared to other methods, this methodical technique offers deeper and more practical insights that may be used. It helps to unearth the cause in-depth and provide us ideas for way forward quicker and more detailed. The outcome? insights that will improve your company's sales, market share, and business performance.
Media Mix Modeling answers some of the following questions:
What is my media mix's return on investment – MROI?
The majority of media's effects are not immediate; therefore, any marketing strategy must take into account halo effects as well as the response throughout the days and weeks that follow exposure. Media exposures may result in an instant increase in conversion, but both in the short and long terms, a significant portion of this influence is frequently misunderstood or incorrectly assigned. All media, including digital ones like video, display, social media, and search, are affected by this. Planning must take into account the sizeable number of indirect, synergistic, and cascading impacts that can occur across channels and over time. A marketing mix model is misleading and can result in bad conclusions if it only takes into account the things that are simple to monitor.
How is the ROI of my marketing mix impacted by non-marketing variables like weather and competitor data?
Complex interactions between internal and external, controllable and non-controllable, performance drivers are prevalent. The actions of rival businesses are examples of external variables, along with natural demand that may alter over time or between different client kinds. It's important to comprehend how your firm is affected by the actions of your competitors. According to us, the ROI of an average brand would stand to lose 10 - 20% of its entire revenue that year if a single competitor of comparable size doubled their marketing and advertising expenditures.
How does my ROI differ between online and offline media?
The world of today, as seen by consumers, is omnichannel. A customer may view a streaming video advertisement for a product, examine it in-person, and then decide to purchase it online using their mobile phone. By putting the consumer at the core of their marketing model approach, brands can keep up with this behavior. Since all media has an omnichannel effect, which implies both offline physical shop presence and online presence are essential elements of the consumer experience, this has been continuously demonstrated. Rather of being in competition with one another, these channels work together and are taken into account in marketing mix models.
How can I make my marketing and media mixes more effective?
A comprehensive, data-driven measuring plan is essential to maximize the return from marketing mix of every brand. From our experience, organizations who strongly adopt analytics and act on the suggestions grow their businesses by a factor of five times more than those who do not. Through the use of analytics like mix models and scenario planning, marketing investments will perform significantly better by between 30% and 70%. Any reliable simulation or forecast with an optimization focus must take into account media and advertising, price adjustments, unique promotional offers, halo, and cannibalization. Our research also demonstrates how an impact may be sustained and added to in order to create an endless amount of value over time.
What is the increase in sales as a result of my marketing efforts?
Having a comprehensive grasp of how each channel affects others in the ecosystem and having a global perspective of the relative relevance of various marketing aspects through Media Mix Modeling are necessary for getting the entire picture of incremental marketing impact. For instance, it is important to include the halo and horn effects when evaluating the impact of advertising in addition to the product or service being advertised. Halo and horn effects have a significant impact on performance, which brands often fails to recognize if they do not use holistic monitoring. Siloed measurement results in the design and execution of online and offline marketing campaigns separately, which is a losing strategy. Furthermore, with that kind of plan, measuring the incremental impact of marketing becomes incredibly challenging. Instead, it involves developing a unified, comprehensive vision across techniques and channels, comprehending the short- and long-term impact each channel brings, and keeping the customer in mind throughout the entire omnichannel experience, from the point of inception to the point of purchase and beyond.
MMM helps both Media buyers and Media sellers to make strategic decisions. Some of the FAQ’s answered by MMM are,
• What is the marketing strategy's return on investment?
• What combination of channels and strategies is best?
• How much money should I set aside for marketing the following year?
• How do I measure the effectiveness of the advertising on my platform?
• How does my media platform stack up against competing platforms?