Market mix modeling may be the key to your marketing future.
Social media, content, influencer marketing, TV, radio, print, events and more. These days, we marketers are lucky to have such a vast array of options at our fingertips, each channel offering unique opportunities to connect with consumers. With that infinite universe, however, comes a need to evaluate the effectiveness of each advertising channel in achieving our goals so that we can optimize otherwise endless spending.
Media mix modeling is what most industry professionals call this marketing analytics technique, but market mix modeling is far more descriptive as a term. If we’re doing our jobs right, we don’t just consider media. We’re constantly looking at an entire market—its seasonalities, pricing, promotions, and more. And because we work within a dynamic and uncertain landscape, we need a type of model that considers these variables.
These days, inflationary pressures, stock issues, and changing media costs aren’t making our jobs any easier. But having a robust performance forecast enables us to think on our feet and react accordingly—as long as we’re working with modern market mix modeling. Now, you may be wondering what are the markers of a modern marketing mix and what are the go-to-market attributes of progressive brands in their marketing mix. I’m glad you asked. Here’s the answer.
Be Aligned With Business Outcomes and Changing Market Conditions
One key aspect of a modern marketing mix is the possibility of adapting to the desired business outcome. Imagine, for example, the board comes to you with the pressing need to generate sales in the short term. The mix needs to be flexible enough to deliver those short-term results, but it can’t neglect long-term growth in the name of focusing on the now.
The key is to be agile and plan for the moment. By that, I mean considering broader categories rather than focusing on specific tactics like linear, CTV, or social. Optimizing fluidly across “video,” for example, businesses can adapt and deliver objectives while not harming long-term growth. It’s a more flexible approach that helps you make data-driven decisions based on current performance, market conditions, and consumer behavior.
Value Quick Measurement
You can be perfectly aligned with the ideal business outcomes and the changing market conditions, but none of that serves a purpose if you can’t measure channels and use this evidence to define what works best for your brand. Thanks to new automation and technology solutions, it’s easier than ever to measure quickly and frequently—and then act on it.
A modern model is built on automation and technology solutions that streamline your marketing efforts and provide speedy insights into your campaigns’ performance. Only then will you be able to do scenario planning, assess the economic risk and forecast different outcomes in changing market conditions. In other words, get more profit out of your marketing budget.
Avoid Outdated Rules
Speaking of marketing budgets, there’s been much ink spilled about the ideal brand split, with many taking the Binet/Field 60:40 rule out of context and using that as a hard and fast split.
If you’re not familiar with it, this split suggests you should spend 60% of your budget on brand building and 40% on performance-driven tactics. This is an average of the study Binet and Field conducted (which aligns with our own benchmarks pre-Covid-19), but if you dig deeper into their work, you’ll see they recommend flexing this by category, position in the market, etc.
We have measured that after Covid, there has been a shift in consumer behavior, and the optimal mix has seen an increase in performance-driven tactics.
Instead of going with the aggregate 60:40 rule, consider your brand’s unique market position, sector, and audience (as Binet and Field suggest). All of these factors will significantly impact the brand split. For some, it will be 90:10. For others, 50:50.
Similarly, outdated tactics have got you following arbitrary distinctions between digital and traditional marketing. In today’s world, 80% of all buying can be digitalized, and the lines between traditional and digital marketing have blurred. Therefore, it is essential to focus on what works best for the brand, whether it’s a traditional billboard or a social media ad.
Engage With Finance Teams
In times of contracting markets and increasing costs, P&Ls are doomed to be reviewed and scrutinized more frequently. With marketing budgets often seen as “easy” to reduce, ensuring every investment is justified, evaluated, and optimized becomes vital.
To do this, you need to make sure finance teams are key stakeholders in the marketing process. Build confidence in the value marketing can deliver, not only in the long term but in the immediate future too.
In doing this, quick measurement will come in handy. Suppose this evidence is collected in days instead of months. In that case, you can use it to determine where to allocate budgets, what works best, and how to act on it—all with impeccable fluidity, allowing you to deploy new tactics, content, and channels in the blink of an eye. And if you do need to cut the budget, at least you can count on these tools to indicate where it’ll have the least impact.
Making the wrong decisions off an outdated model could cause you to lose a significant portion of your media revenue. Applying a modern market mix can pay off big time.
Set your business up for success by ensuring a fluid process where you can allocate budgets, target audiences, and select channels with agility—measuring their effectiveness in days rather than months and making adjustments as needed.
Remember that engagement and socialization of results and actions across the organization, particularly with Finance, is critical for ongoing success.