FEATURE7 August 2017

In the Mix

x Sponsored content on Research Live and in Impact magazine is editorially independent.
Find out more about advertising and sponsorship.

Tim Phillips

AI Data analytics Features Impact

Knowing where best to invest marketing spend requires context, precedent and common sense. Marketing mix modelling can be a vital tool for determining return on investment, but the models are not without their limitations. By Tim Phillips

In the mix 1

Marketing mix modelling (MMM), in which historical data is fed into a model to try to optimise the return on marketing investment, has been a tool for marketers since the early 1990s. In the 2010s, it has created a flourishing sub-discipline: predicting the demise of marketing mix modelling. “To be provocative, I believe it will become obsolete, ” said Laura Desmond, then CEO of Starcom MediaVest Group, in 2011. 

“If MMM is to survive, it is essential that it change and experience a rebirth, ” the editors of GreenBook claimed in September 2016. For this article, Michael Wolfe – one of the pioneers of the technique in the 1980s – told Impact that he believes the discipline is “in crisis” (see p30, A crisis in MMM?).

Like any statistical tool, MMM can’t please everyone all of the time. There are marketers who can’t learn much of any interest from the available data – for example, if there is a particularly long and complex ...