Most brands would be hard-pressed to think of a more disruptive time for business than what they’ve experienced over the past 18+ months. From shifts to digital to advertising cutbacks to supply chain challenges to rising privacy and data security needs—all amid a global pandemic—the landscape for advertisers has been anything but smooth sailing.
Given the environment, which remains very much in flux, the focus on efficient marketing and tangible returns on investment (ROI) remain elevated, especially in industries where the ad recovery has been slower than others. With so much at stake, it’s not surprising that many brands have started exploring the prospect of bringing their marketing analytics in-house. In the face of all that’s happening in the world, it’s not an irrational notion. But it needs to be executed in the right way.
Importantly, the world of marketing technology has matured significantly in recent years, offering brands an array of solutions to help with everything from promotion to social media engagement to commerce. According to the Chief Marketing Technologist’s Marketing Technology Landscape report, the landscape was rife with 8,000 different martech solutions last year—up more than 13% from 2019. That’s a lot to navigate—and well before any actual analytic work comes into play.
As vast as the growing sea of available solutions is, marketing mix modeling (MMM) is the most critical solution for advertisers to understand and optimize their marketing dollars holistically. MMM can be leveraged globally, whereas certain data-needy solutions only provide coverage in top markets. Amid a rapidly fragmenting media landscape, in-market MMM expertise is a foundational need for brands looking to ensure that they’re spending their marketing dollars in the most effective channels.
While MMM is invaluable, it requires experience and accuracy to be truly effective. For example, Nielsen’s MMM studies have found that marketers waste between 25% and 50% of their spend because they aren’t able to determine the impact on ROI. In order to narrow that waste, brands need robust and time-tested MMM to successfully determine the qualitative results of each marketing activity.
At its core, MMM is the use of statistical analysis to understand the impact of previous marketing efforts on sales and to predict the impact of future initiatives. For marketers, MMM considerations should cover four key points:
- A holistic view of marketing performance
- Ability to impact planning and optimization of marketing budgets
- Comparable measurement metrics
- An eye for the future (privacy considerations, consumer consent, etc.)
MMM—just one analytic capability that some brands are considering bringing in-house—is complicated. Creating what is, for all intents and purposes, an in-house analytic agency is not a small effort. The technology, staffing needs and expertise requirements are extensive and likely very costly. And to do it right, those costs are perennial. That being said, advertisers can properly in-house aspects of their analytic framework if they have a solid plan and partner with the right analytics provider.
The first thing every advertiser needs to do is harmonize their data and formulate a data strategy. Having access to accurate data and a strategy on how to use the data is the cornerstone of reliable and speedy MMM results. Reliable in-house data alleviates any stress around privacy and security with respect to MMM. Properly safeguarded data gives advertisers the comfort in knowing that data sharing is controlled, that privacy is maintained and that the data can be delivered in an automated manner at the right level of granularity.
The second thing that is a key to success is scheduling a regular analytics update cadence that aligns with decision making and planning periods for each brands’ individual business. Technology has advanced in such a way that with automated data delivery, model results can be updated and delivered where and when they need them. This removes the Herculean effort it would take to stand up an in-house analytics team responsible for both developing and maintaining the technology as well as actually running the analytics. This also allows advertisers to continue taking advantage of the superior analytics and industry-leading solutions that a focused analytics agency provides.
Advertisers should also look for an MMM partner that can provide expert consulting when needed, as well as one that provides results and simulation/optimization capabilities in an easy-to-use interface. Partners should also have an understanding of different markets and maintain benchmarks in order to gut check MMM findings. Generating MMM results is part of the battle, but ensuring you’re able to understand and apply the results is another challenge entirely, which is a skill that MMM analytics companies have developed after years of working in the industry. This affords advertisers the flexibility to in-house none, part or all of the actual interpretation and strategic consulting that is required to take advantage of MMM results.
Once an advertiser automates its data collection, has access to a user interface that can be updated on a regular cadence, and has a plan for strategic consulting based on the MMM results, it has the in-house requirements needed without the heavy lifting involved with analytic upkeep and modeling, helping ensure that marketing dollars are spent effectively and efficiently.