When measurement gets tough, the tough get crafty
It’s no secret that here at Booster Box we love raising the innovation bar by delivering new projects & tools. And it’s also no secret that we’re the best* at it, according to our moms.
Moms are always right, but we want to prove our awesomeness with more scientific evidence. That’s why we are thrilled to announce we have a brand new shiny tool in our work belt…
But first, let’s start with what was broken: measurement
Before finding a remedy, we needed to understand the scope of the damage. Measurement is getting complicated, especially when we talk about multi-touch attribution. Several trends are pushing towards further limitations for MTA: the beginning of the Cookieless era marked by the deprecation of 3rd party cookies in the name of consumer privacy; worry over whether brands have over-invested in performance marketing at the expense of Brand building, thus, moving away from Bottom of the funnel initiatives; Platforms being walled gardens and User Journeys being more of a “messy middle” instead of a “Funnel”. Life is complicated and the more complicated it gets, the more platforms or channels it takes place on and the more difficult it is for us to measure. And…”If you cannot measure it, it does not exist!”.
But…
Dear negativity, please close the door on your way out.
All these trends are challenges but they also mean we have the opportunity to do a better job in understanding the contribution of each channel to the overall marketing mix.
So, here comes the fixing tool
You know that feeling when you make planning smoother? Well, that’s exactly how you’ll end up feeling! Any business worth its salt should start its planning with budget optimization and all marketers wanting to make their lives easier should optimise future spends to maximise effectiveness. But how can one plan future success, you may ask. Well, with Marketing Mix Modeling (a.k.a. MMM) by your side, you have the perfect assistant to help you with this task.
Let’s take a trip down the statistics hole
The MMM approach is based on statistical analysis using advanced techniques to work with top-down, macro-level information allowing marketers to measure past performance and chart a path for future success. By quantifying the impact of various marketing channels as well as offline activities on sales or other specific conversions, it helps brands understand and assess the true value of their investments and then it can forecast the impact of those very activities on future sets of tactics.
Basically, the purpose of using MMM is to establish which mediums are working better than others, to understand how much each marketing input contributes to sales, and to measure how much room for growth there is in each marketing channel. Practically speaking, by measuring brand sales contribution and ROI for each element of a marketing mix and estimating diminishing return curves, you can easily allocate your budget by shifting money from low ROI mediums to high ROI mediums thus maximising sales while keeping the same budget.
The Booster Box approach
We wanted to give a taste of the medicine so we built a simplified version of the model with a tool enabling clients to create their very first Marketing Mix Model. From this basic version, we can then evaluate if the data is sufficient to use more advanced models. To obtain an accurate forecast, we compare different models, trying to understand which one has the best outcomes for each and every single client. Our approach aims to reduce human influence by using automated algorithms and allows actionable decision making, providing a budget optimiser and easy comparability between models.
The complete approach to MMM is much more detailed than our first mini tool – which is still useful for taking a quick look at the overall picture -.
The full analysis has higher complexity with the final outcome including:
– Modelling of saturation functions, in order to account for diminishing returns;
– Estimates of the delayed effects of media spends;
– Optimal budget allocation across Advertising Platforms;
– Continuous recalibration of the model
To 🌯 it up, thanks to our entire procedure, you will be provided with priceless insights for actionable decision making. And we promise your future will be so bright it will burn our eyes!
