The Full Measure on MeasureUp (4 of 4)

MeasureUp is a great conference for all things marketing ROI and return on marketing investment ROMI put on by the IIR.  They put on some great events and I highly recommend you take a look at their site for some upcoming events.  To summarize this series of 4 posts the Measureup conference there were a few major points that I came away with:

1. Marketing Mix Modeling may have peaked. Marketing Mix models have provided great insight over the years, but lately many have been shown to only deliver short term insights. When used in a competitive, mature category, such as, for the Oreo brand, MMMs typically deliver short term insights in that temporary price reductions can increase sales. Unfortunately, they also lead to loss of brand value. MMMs don’t include the long term brand value that can be destroyed through continuous price actions. Consumers simply get trained to always buy on ‘deal’.
2. Social media although is growing and is important for many brands, it still has a long way to go to be a major contributor for some of the top consumer brands. For the rest of us, though social media can still drive a lot of brand engagement, it can be measured and will continue to grow in importance.
3. Analytics and measured insights are becoming more and more important in marketing decision making. Marketers are finally embracing analytics and using them to their advantage. There is still a long way to go, but it is progressing swiftly.

There were many more insights and I hope next year you’ll have a chance to participate as well.  Just let me know if you would like further information on any of these topics.

Comments

[Guy R. Powell]

John,

Yes, the conference was quite interesting. One of the presenters brought up the fact that MMMs generally only deliver short term value and don't look at the long term value of advertising. Many of the other attendees also agreed with him. This is especially true when we think that MMMs use volume as their dependent variable. This is Last Touch Attribution across the marketing mix. This is especially true if TPRs (temporary price reductions) are brought into the mix. So peaked, doesn't necessarily mean that they won't be used, their growth will probably slow.

What's missing is the long term value of advertising (check out one of my white papers at http://www.marketing-calculator.com/DownloadNow.aspx ). Advertising drives brand attributes, purchase intent, awareness and customer equity. These don't get counted in a typical MMM. If you're interested in techniques around this, just let me know.

[John Dawson]

Hi Guy,

Interesting summary - I wish I could have attended.

Can you expand on the potential clash between points 1 & 3 above? I'm surprised you're saying MMM has peaked (although I certainly agree that it has done in many forms) as I still see businesses every week that have yet to even discover basic MMM.

I do agree that MMM doesn't give answers often on long-term impacts and it's something we need to work on. However I've rarely if ever seen MMM analysis that would recommend brand owners get into a discounting scenario. Whenever I've seen this conclusion from a MMM study, I'm always sceptical. I suspect it's often down to poor modelling.