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Market Mix Modelling

Market mix modelling, also known as econometrics, involves analysing historical relationships between business performance and marketing activity. It enables organisations to understand how much each marketing input contributes to sales and profit and therefore how much to spend on each.

More than just media

Many clients are not getting as much from their market mix modelling project as they could. To be reliable, models need to include all important drivers of sales, and this means that good models include a wealth of information outside of traditional media effectiveness.

We routinely answer questions about how best to allocate advertising budgets across different media channels, but we also answer questions about other drivers.

Some questions we have answered:

  • How can we respond to structural change being brought about by technology?
  • The CFO thinks we should only do online advertising now. Is he right?
  • How can we use media to reduce our reliance on a strong price/proposition?
  • Should we focus mainly on sales through aggregator channels? Or direct?
  • What is the right mix between brand building activity and activation?
  • Which competitors have been most damaging? What can we learn from their activity?
  • Which months in the year are most important for us?

A unified view incorporating existing research

The best market mix modelling projects incorporate what is already known about all drivers of business performance, and quantify the importance of each.

Market mix models, when done well, should mostly verify findings from other research. They should quantify the role of drivers investigated in brand tracking, market intelligence reports, media consumption research, and digital response studies. Importantly they should also help organisations to understand which is of these is most important, and how best to influence it.

We not only read our clients’ existing research, we interview people from a range of departments, carry out mystery shops, and incorporate academic research on category trends.

Ensuring that research leads to action

Acting on the recommendations of market mix modelling projects often means taking big decisions and changing long-held marketing strategies. This takes time. People at all levels need evidence and support as well as test and learn experiments. We typically stay involved for months after the first debrief, working closely with clients and their agencies.

We often combine market mix modelling with digital attribution, and help clients to build in-house marketing analytics capabilities. To hear more, get in touch through our contact page or email info@graciouseconomics.co.uk

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