Benefits and drawbacks of the marketing mix modelling

Marketing professionals have the tough job of developing effective marketing strategies within limited budgets. A marketing strategy's outcome depends on a myriad of factors such as buyer behaviour, market conditions, seasonality, competition, and more. The dynamic nature of the marketplace does not make things easy for marketing professionals.

Marketing is done across various online and offline channels. The impact of each of these channels is measured to identify effective channels and focus on them. This, in essence, is what the Marketing Mix Model (MMM) is all about!

An MMM analyses the impact of each marketing channel on sales based on historical data of various marketing and non-marketing factors, to develop future strategies. The study is made considering several factors such as the interdependence of different channels, economic data, weather conditions, etc. Based on this data a demand model is developed. The demand model quantifies the historical contribution of each marketing/non-marketing input. This analysis helps in budget allocation for different marketing strategies across channels.

MMM has been around for several years. However, today an omnichannel measurement capability is needed to accurately assess the ROI of a marketing campaign. The task has become complex with the need to track the exposure to ads on both digital and traditional channels. So, the question arises, “Is MMM relevant in the current market scenario?”

MMM has its specific set of advantages and disadvantages. It is recommended that a marketing professional understands the pros and cons of this model to assess its relevance for their marketing campaign.

Following are some pros and cons of the marketing mix model:



Thanks to Big Data, businesses have the accessibility to large volumes of data that can help in analysis. The analysis facilitates accurate demand prediction.

Considers Multiple Variables:

One of the most beneficial aspects of MMM is that it considers all media and non-media micro and macroeconomic factors making the analysis comprehensive.

Facilitates Long-term Planning:

MMM entails high-level analysis across the entire media portfolio. These insights help in delivering long-term planning insights into addressable and non-addressable media.

Helps in Overall Marketing Budget Planning:

MMM considers several external factors and so serves as a good starting point for high-level overall marketing budget planning.

Holistic Approach:

MMM considers several external and internal factors in its aggregate data collection. In other words, it gives marketers a panoramic view of their prospective markets. This enables marketing leaders to estimate marketing budgets accurately.

Facilitates Strategy Planning:

The marketing mix model highlights major marketing trends that can be leveraged for strategy planning.


Demand Model is not Agile:

The demand model is developed based on historical business outcomes based on probability. Besides, it is based on several assumptions for several non-marketing factors. Hence, the demand model is not capable of adapting to fluctuations in market conditions of consumer behaviour. MMM lacks agility and cannot be optimised for day-to-day changes.

Relies on Historical Data:

MMM relies too much on various assumptions for non-marketing factors and channel-level media mix, etc. Since the data does not diverge from historic data it may not be relevant for forward-looking projections.

Lacks Granular Insights:

In today’s competitive marketplace, marketers need accurate data on aspects such as customer behaviour, insights into cross-channel marketing, proper marketing attribution, the impact of creative marketing across channels, and more. MMM lacks the ability to provide these insights. Hence, it becomes difficult to optimise marketing based on the data provided.

Not Suitable for Digital and Traditional Media Mix:

Digital marketing has complicated MMM by creating a fragmented media mix of digital and traditional marketing. This mix makes it difficult for MMM to measure the combined digital and traditional marketing ROI accurately.

Final Takeaway

The marketing mix model has its set of benefits and drawbacks. While it provides valuable insights on the overall marketing trends, holistic view of customer behaviour, etc., it lacks the ability to provide specific insights for personalised marketing. Hence, it is a good idea to use MMM with other marketing models like the attribution model for better results.

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