Advertisers have a variety of possibilities to reach their potential customers. But with all these options, the question is which measures are really effective and achieve the desired results. In order to make their marketing strategy as efficient as possible, companies collect and evaluate huge amounts of data to prove the ROI for each marketing initiative and to advertise as effectively as possible.
The need for accurate measurement has never been greater. Nevertheless, many advertisers still rely on outdated measurement approaches such as Last Cookie Wins. However, these models are extremely inaccurate and unreliable because they ignore important contact points. As a result, marketers often make wrong decisions when it comes to allocating advertising budgets across all channels, campaigns and actions.
So, what is the best approach to gain meaningful insights and make intelligent decisions? Our blog post helps you answer these questions.
MARKETING MIX MODELING AND ATTRIBUTION: DIFFERENCES
Marketing Mix Modeling and attribution are two modern approaches to perform marketing measurements. Both methods provide advertisers with important insights that are relevant for the strategic planning and each brings its own advantages. Both approaches enable marketers to make more profound decisions.
The two methods were created for different purposes and therefore cover different needs. Marketing Mix Modeling provides high-level strategic insights for budgeting and long-term planning. Attribution provides tactical insights for short-term optimization.
Marketers have different information needs and different requirements that they must meet. For a holistic view of their marketing, advertisers need both approaches.
STRATEGIC PLANNING WITH MARKETING MIX MODELING
Marketing Mix Modeling uses aggregated historical performance data on a quarterly or annual basis. The model calculates the impact that each marketing channel has on sales, while taking into account external factors such as weather and seasonalities that also affect business performance.
Marketing Mix Modeling uses this aggregated data to provide comprehensive recommendations on how marketers should allocate their budgets for optimizing performance. In addition, advertisers gain insights into non-performance-related influences, such as the company's brand equity.
OPTIMIZATION WITH MARKETING ATTRIBUTION
Marketing attribution captures and analyzes data from digital channels such as Display and SEA. For this purpose, the model measures every touchpoint along a customer journey and determines its contribution towards the conversion.
In addition, the analyses are proceeded much more frequently and at a more granular level, e.g. at keyword or creative level, so that the information is always up-to-date and detailed. Attribution provides insights into the conversion path of the individual consumer across channels and devices.
With these insights, advertisers can make tactically smart decisions in real time, efficiently plan their digital actions and optimize their advertising budgets.
ONE MODEL IS NOT ENOUGH
Although recommendations from marketing mix modeling can answer questions about the performance of individual channels (TV versus print versus digital), they do not offer the same granularity as a data-driven attribution model, which can break down the user's touchpoints down to creative or time stamp.
Another important difference between the two approaches is the modelling frequency. Dynamic attribution models are updated at a much faster rate than marketing mix models. While the conversions are even recorded in real time, the attribution algorithms calculate the value of the individual contact points and channels on a daily basis.
This frequency and granularity of insights allows advertisers to determine which channels and actions are most effective (or least effective) while the campaigns are still running. This eliminates the need for marketers to wait until the end of a campaign to analyze results and uncover potential for optimization.
MARKETING MIX MODELING AND ATTRIBUTION COMPLEMENT EACH OTHER
While there is no single strategy for marketing measurement, any advertiser using both online and offline channels should consider both approaches. Because of the different benefits of the two methods, marketers get the best results when they are combined.
This way, synergies between online and offline channels can be identified and marketing specialists can find out how both worlds interact. A holistic measurement approach provides a comprehensive overview of marketing performance that can deliver significantly better results.