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The Limitations of Marketing Mix Analysis

17 Feb 2022

With retail media all the rage these days and CPG organizations debating the reallocation of national media dollars toward retailer-specific programs, the need to accurately evaluate performance across marketing tactics has become more critical than ever.

CPGs have long used marketing mix modeling to measure and compare ROI across various media activities and help them plan future spending. For a number of years now, many organizations have attempted to incorporate shopper marketing activity into the modeling as well. But does this approach provide an accurate understanding of shopper marketing performance?

Marilyn® Says: Traditional marketing mix modeling was designed to measure “big picture” results from mass media campaigns with relatively large budgets. It therefore can be very challenging to measure the results gained through shopper marketing, which often involves numerous smaller, varied tactical activations that can easily get lost within the broader context of a big media spend.

Traditional models also don’t typically account for the synergies that happen when trade and shopper marketing programs are combined, a key factor to consider when evaluating performance. So while this approach can provide a general read on shopper activation within the context of the model, it doesn’t deliver enough granular detail to fully measure its impact, and therefore can be misleading as a directional guide for future spending.

What’s needed is a commerce-focused modeling solution that can isolate these more granular activations, properly attributing the lift of commerce marketing programs by providing detailed analysis of performance at the brand, retailer, program and tactic levels. These results can then complement traditional models to deliver a better read on the whole picture, big and small.

The industry’s first end-to-end commerce marketing advisor, Marilyn® lets marketers streamline their data, optimize spending, plan strategy and measure results — all in one platform. The Marilyn® platform helps clients optimize performance by providing a single source of truth for all omnichannel marketing activity, ROI analysis and attribution, and scenario planning. To learn more, contact [email protected].

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