Identify the key areas for effective investment and establish a rationale for allocation.
-- MMM (Marketing Mix Modeling)
Magellan
The budget is decided every year. The justification for it is insufficient every year.
Separate direct and indirect contributions across channels, and their short-term and long-term effects. Derive the following allocations using explainable figures.
Why do we need MMM?
In today's complex marketing environment, many variables affect business outcomes: promotions, pricing, competition, seasonality, and even weather. To accurately measure marketing ROI and understand the factors that influence business outcomes like sales, you need a comprehensive measurement framework that takes these factors into account.
Without understanding these factors and their impact, it's difficult to make optimal decisions regarding your marketing strategies and tactics. That's where our MMM consulting services come in. We offer a comprehensive view to help you make data-driven decisions with confidence.
MAGELLAN's MMM analysis function
Considering the indirect effects of marketing
It is possible to visualize not only the direct effects on the results of marketing activities, but also the indirect (ripple) effects.
*Capturing path structures in MMM is a patented technology of XICA.
On-off integration allows you to properly evaluate each measure and maximize business results.
Considering the mid- to long-term effects of marketing
You can visualize not only the immediate impact of your actions, but also the impact they will have on your bottom line over the days, weeks, and even years to come.
It will be possible to make optimal marketing investment decisions to continue winning
Visualize the impact of external factors (competition, seasonality, etc.)
Get a more accurate picture of the results of your marketing efforts by taking into account the impact of uncontrollable external factors such as weather, seasonality, macroeconomic trends, and competitive activity.
Ability to accurately grasp changes in the market environment and optimize marketing
Simulation of response curves and saturation points for each media
It is possible to accurately predict how business results will change depending on the amount of investment for each medium, taking into account flexibility.
Budget allocation can be optimized based on simulations.
Main outputs of MMM analysis
Quantify the impact of marketing initiatives on results
Calculate the impact (contribution) of marketing on results. Evaluate the effectiveness of all marketing elements using the same indicators.
Evaluate the effectiveness and efficiency of each marketing initiative
We comprehensively assess the effectiveness, efficiency, and investment costs of each marketing initiative to determine the outcome of the initiative and appropriate allocation of resources.
Simulation of optimal budget allocation
Simulate optimal marketing budget allocation based on objectives such as maximizing results and minimizing costs.
What you can expect from MMM Analysis Consulting
Expert-led processes aligned to your business needs
MAGELLAN goes beyond just providing tools, we provide dedicated consultants and analysts to support our clients in meeting their specific needs and challenges, providing practical, concrete insights that are more directly linked to their goals and enable actionable results.
Balancing complexity and transparency
To enhance confidence in the data, we employ transparent and explainable models. By designing models together with our clients and keeping every process open, we deliver reliable analytical results. The entire team can accurately understand the decision-making process and gain compelling insights.
Quarterly or monthly reports and model updates
While traditional MMM analyses are typically conducted once or twice a year, MAGELLAN provides quarterly or monthly reports and model updates, delivering timely, actionable insights aligned with clients' planning and budget cycles, ensuring decisions are always based on the latest models.
A neutral and unbiased approach
Because XICA has no ties to specific data assets or media businesses, we provide neutral and unbiased insights. We are dedicated to helping our clients achieve sustainable business growth and provide the best possible support.
MMM Analysis Project Process
Overview of the MMM Consulting Process
Setting Project Goals and Scope
First, we discuss and clarify the goals and scope of the project, which allows us to set the most effective analytical framework for the specific business challenges and marketing objectives that our clients want to achieve.
Data Collection and Cleansing
We collect the necessary data from the client, cleanse it, and prepare it for analysis. To adequately capture seasonality and other factors, at least 13 months of data is required, and 2-3 years of data is recommended.
modeling
Using MAGELLAN's MMM modeling technology, a model is built based on the collected data, and is designed to evaluate the direct and indirect effects, as well as the short-term and long-term effects, of the measures.
Analysis and interpretation
The results of the model are analysed to gain insight into how marketing activities and external factors affect sales and other business outcomes, as well as their cost-effectiveness and efficiency.
Reporting
Based on the analysis results, we perform simulations and predictions to provide clients with insights and recommendations, which allow them to develop concrete action plans that help optimize their operations.
* Required data:
Examples of data required for a MAGELLAN project are sales and conversions, i.e. KGIs to be optimized, marketing activity data, and non-marketing factor data.
- Examples of marketing activity data: online advertising impressions, views, clicks, engagement, organic search volume, website and store traffic, TV and radio GRPs/TRPs, magazine and newspaper circulation and readership, etc.
- Examples of non-marketing factors: promotions and discounts, economic indicators, weather, seasonality, competitor trends, etc.
Project Schedule
The entire process, depending on the time required for data collection, typically takes about three months from the initial analysis results (confirmation of the analysis model and accuracy) to the first report, including the time spent confirming the model with the client.
Building the foundation for the marketing PDCA cycle
Through analysis and reporting using the latest data, we aim for continuous improvement and optimization by repeating the PDCA cycle and hypothesis verification on a quarterly or monthly basis.
A practical guide to modern MMM (Marketing Mix Modeling) for marketers
MMM (Marketing Management) quantifies the effectiveness of marketing activities, enabling optimal budget allocation and decision-making. However, its effective implementation requires specialized knowledge and experience in areas that many marketers are not yet familiar with. Based on our experience supporting over 280 major companies since 2016, XICA has created a guide summarizing the know-how for successful MMM implementation.
Read MoreDifferences between MAGELLAN and conventional MMM
Modeling with Path Analysis The wolf's wolf
We construct a multi-stage model that depicts the customer journey from awareness to business outcomes such as purchase, allowing for a deep understanding of the individual and overall impact of each marketing initiative. The advantage of path analysis is that it allows for accurate understanding of the impact of initiatives with significant indirect effects (ripple effects), such as awareness-building initiatives. This enables appropriate evaluation without underestimating or overestimating each initiative.
Brand Equity Analysis
We evaluate the impact that marketing activities have on the baseline results over the long term. By visualizing fluctuations in brand value, which is difficult to quantify, we support the formulation of sustainable growth strategies, including reviewing the effectiveness of measures.
Backtesting to verify and adjust models
Models created with MAGELLAN undergo backtesting using historical data not used for training, verifying and adjusting the model's accuracy. This increases the model's reliability and enables more realistic predictions and optimizations. This is why MAGELLAN requires a minimum of 13 months of historical data. The model is trained on one year's worth of data, predicts business results at the 13th month, and then compares and verifies these predictions with actual results.
Systemization and automation
We ensure the speed of model building and analysis without sacrificing accuracy or flexibility, enabling faster decision-making and adapting to market changes, enhancing your competitive advantage.
Building a customized model
A major advantage of MAGELLAN's multi-stage modeling technology is its ability to customize models to match the client's specific marketing hypotheses, business needs, and industry characteristics. The diagram is illustrative; the number of steps and the variables within each step can be increased or decreased. XICA's consultants and data scientists work with clients to design the appropriate model.
The value MMM analytics brings to the entire organization
For Brand Marketing Managers
We provide a 360-degree view of your marketing strategies to enable data-driven decision-making. We help you plan and optimize for sustainable growth, and support strategic decisions for long-term business success.
For Data Analysts
With transparency into model design and analysis logic, you can be confident in the reliability and accuracy of your analysis.
For Corporate Planning and Finance Managers
With a clear understanding of marketing performance, effectiveness and efficiency, you can adjust your investment strategy to drive value creation and growth for your company.
