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In the latest video in our series on third-party cookies deprecation and the impact on attribution, we take a look at Market Mix Modeling (MMM) and how it can enable marketers to measure channel performance without the need for third-party cookies.
If you’ve been paying attention to the latest Adverity explainer videos, you’ll know that with third-party cookies being phased out, attribution modeling is likely to become difficult, if not impossible, in the very near future.
However, the good news is that there are other methods for measuring the performance of different marketing channels. One such technique is called Market Mix Modeling, and that is precisely what our latest video is all about.
While attribution modeling takes a bottom-up approach, analyzing how different channels and campaigns contribute to sales at an individual user level, MMM uses statistical modeling to find correlations between marketing investments and returns at a macro-level.
OK, but what on earth does that mean?
Well, by looking at how much each of your campaigns have historically impacted your sales over a given period, MMM can calculate the likely impact of future campaigns on any given channel.
However, since there is a huge number of factors that will impact sales and channel performance, MMM calculations need to also include a wide variety of variables. Things like promotions, market conditions, competitor activity – even seasonality. Basically, anything that might affect user behavior needs to be taken into account.
At the same time, for all the campaigns you are running, your marketing spend is going up and down and all this needs to be factored in. This means that MMM calculations are extremely complex and this is one of the most significant drawbacks to the approach.
Because of the complexity, traditionally MMM calculations take a long time to update with new data. What this means is that, when you start updating your model with all the data from the previous 3 months at the end of Q1, you still need to wait another 4 to 6 weeks before the results are ready
at which point they may or may not be relevant anymore and you’re already halfway through Q2 anyway.
Naturally, in the rapidly moving digital online world we live in, this is far from ideal. That’s why today, most businesses utilize the power of more advanced AI analytics platforms to deliver what is known as Continuous MMM.
As the name implies, Continuous MMM goes beyond the traditional project-based approach to MMM to provide continuous calculations. This means that marketers can make regular adjustments to channel spend based upon real-time data into performance without having to wait 4 months.
However, whether considering a traditional or continuous model, the crucial factor to remember is that MMM approaches do not rely on third-party cookies. As such, as third-party cookies are slowly phased out, marketers will still have a reliable method for tracking channel performance.
To find out more about continuous market mix modeling, take a look at Adverity’s ROI Advisor, an advanced MMM solution for channel attribution in the cookie-less era.