Introduction to Marketing Mix Modeling for SMEs
Marketing mix modeling (MMM) is a contemporary statistical tool that empowers marketers to quantify the impact of several marketing inputs on sales or market share. With MMM, a brand can streamline its marketing efforts and direct them towards the right audience, at the right time and investment level.
MMM is an accessible, predictive marketing analytics tool for companies of all sizes. MMM has historically been viewed as a tool used by large enterprise companies due to its high cost and large team size needed for implementation. In this guide we will discuss why Keen’s MMM tool is accessible for small and medium-sized enterprises (SMEs) and how it is revolutionizing marketing teams within these companies.
Automation of Data Collection
In our dynamic marketing environment, the automation of data collection has become a cornerstone for efficient data management and insightful analysis. It’s a critical component of marketing mix modeling that helps to understand and manipulate multiple marketing variables.
Automation significantly lightens the workload and reduces time spent on manual data collection, minimizing the need for extensive team involvement. It also decreases the potential for human error. This efficient system ensures that businesses can focus on key aspects that demand strategic attention, like cross-channel marketing optimization, rather than data gathering. This marketing efficiency improvement results in both time and cost savings.
The Benefits of Bayesian Modeling
Keen’s utilizes Bayesian marketing mix modeling techniques. These methods leverage prior estimates of tactic elasticity and continuously learns from new data. This approach results in a model that adapts and evolves over time, ensuring relevance and accuracy.
Some additional benefits of Bayesian modeling for small to medium enterprise companies include:
Incorporates Prior Knowledge: Bayesian modeling allows marketers to incorporate prior knowledge or beliefs into the analysis. Prior knowledge can include ROIs from previous campaigns, results of brand studies or any other data you think is relevant to help understand your business. This is especially useful when there is existing information about the effectiveness of certain marketing channels or when there are strong assumptions based on industry expertise.
Handles Small Sample Sizes: MMM may face challenges when dealing with limited data. Bayesian methods can handle small sample sizes more effectively by incorporating prior distributions, helping to provide more stable estimates even with limited data.
Accounts for Uncertainty: Bayesian models naturally provide a framework for expressing and quantifying uncertainty. This is particularly important in MMM, where there can be various sources of uncertainty, such as seasonality, market dynamics, and external factors. Bayesian models provide credible intervals that give a range of likely values for the model parameters, providing a more nuanced understanding of the results.
Flexibility in Model Complexity: Bayesian modeling allows for the incorporation of complex relationships between variables. This flexibility is beneficial when dealing with a diverse set of marketing channels and intricate interactions between them. The model can be adjusted to capture nonlinearities and interactions more accurately.
Dynamic Updating: Bayesian models can be easily updated as new data becomes available. This is crucial in marketing, where the effectiveness of channels and campaigns can change over time. Bayesian methods allow for adaptive learning and continuous improvement of the model as new information is gathered.
Probabilistic Outputs: Bayesian modeling provides probabilistic outputs, allowing marketers to make decisions based on the likelihood of various scenarios. This can be valuable for risk assessment and decision-making in marketing strategies.
Ideal for teams with limited resources
These efficiencies make it an excellent fit for marketing teams with limited resources. Marketers can extract maximum insights from their existing data, fostering smarter, data-driven marketing strategies and decision-making without the need for extensive data collections or complex infrastructures.
In addition to this technique, we also bring our patent-pending Marketing Elasticity Engine as our knowledge estate. This acts as our custom priors for your brand, which can be influenced through the regression model when we load in your knowledge estate (time series spend, clicks, impressions, COGS, etc).
Scalability and Adaptability of MMM
Scaling your brand to new heights requires a flexible marketing technique – one that transforms as your business objectives grow. Marketing mix modeling is scalable and dynamic in nature. It proves to be immensely beneficial for businesses focused on escalating their market presence.
Adapts as your team and budget grows
It flexibly adapts to your budget and team’s capacity. Whether you have a big marketing budget or you’re operating with less, marketing mix modeling:
– Customizes your marketing strategies based on budget constraints
– Efficiently executes these strategies with a fluctuating team size
– Optimizes your marketing efforts, ensuring maximum ROI
Gaining a Competitive Edge through MMM
The true value of effective marketing mix modeling can be realized in achieving a significant competitive advantage. By understanding the varying components and the interplay among them, a brand can make its marketing activities more effective.
Marketing Efforts More Targeted and Effective
Comprehending the interactions among different components of the marketing mix enables a targeted approach. For example, to better allocate your budget, a model will identify where and when money should be spent for maximum impact. Or, if you are looking to predict future outcomes, the model will provide an understanding of the impact of different variables can help in anticipating future market behavior.
Leads to Higher Returns That Justify Initial Investment
Keen’s marketing mix models lead to increased efficiency, improved return on investment, potentially contributing to substantial growth – all of which justify the initial investment required.
Cost Effectiveness of MMM for SMEs
Cost effectiveness is the focus of companies, regardless of size. Marketing technology for SMEs must be cost-effective because it is imperative that an investment in a marketing mix modeling solution will show a return in efficiency and effectiveness.
Keen’s affordable pricing structure is designed to provide SMEs with a cost-effective marketing analytics tool with a variety of purchasing options to meet their needs.
The Accessibility of MMM for All Business Sizes
In conclusion, marketing mix modeling (MMM) is a data-driven tool that is now available for companies of all sizes, including SMEs.
|Benefits of Keen's MMM solution
|Benefit to SMEs
|Automated data collection
|Less internal resources required
|Uses Bayesian methodologies
|Provides accurate results with limited data
|Adjusts to the team's size, budget and aligns with growth objectives
|Makes marketing more targetable and effective
|Allows you to gain a competitive advantage
|Affordable and allows teams to work more efficiently and effectively