Maximizing ROI with Marketing Mix Modeling (MMM) for Effective Budget Reallocation

Optimize the allocation of marketing investments across online and offline channels to ensure sustained sales growth without increasing the budget.

We developed a Marketing Mix Modeling (MMM) framework to identify the sales impact of various marketing initiatives and external factors (economic conditions, seasonality, etc.). The MMM provides businesses with actionable insights on resource allocation by evaluating the effectiveness of strategies, channels, and campaigns. This enables optimized marketing budgets to maximize return on investment (ROI) and lower cost per acquisition (CPA).

To achieve this, we consolidated sales, pricing, marketing budget, and external factor data to power machine learning algorithms. Our data scientists (PhDs in quantitative methods) used this data to:

• Model baseline sales, seasonality, and the impact of external factors.
• Evaluate the effect of pricing on sales.
• Assess the influence of competition on sales.
• Identify the sales driven by each marketing channel, whether digital or traditional.

The model achieved an 89% accuracy rate, providing clear insights for reallocating the marketing budget. By implementing the recommendations, the company experienced a 10% increase in sales. Additionally, the analysis offered deeper insights into key external factors and competitors that most influence the company's performance.