Latest Trends and Future Outlook of MMM (Marketing Mix Modeling) (2024 Edition)

2024.10.30 Column

XICA has been working with data science for over 10 years and has promoted MMM projects with over 250 clients."MAGELLAN"We have always been at the forefront of the MMM field, developing MMM solutions that incorporate unique functions and analytical methods such as the above. Our prediction is that MMM will undergo further transformation in the future due to technological advances and improved data utilization.

In this article, we will take a closer look at the latest key trends and future prospects for MMM, as well as how new technologies and innovations are advancing MMM.

1. Data and technology evolution

The future of MMM is expected to see dramatic improvements in predictive accuracy and practicality due to the evolution of diverse data sources and artificial intelligence and machine learning (AI/ML), allowing companies to develop more precise marketing strategies and quickly respond to changes in consumer behavior.

Diversifying and expanding data sources

The use of MMM is expected to develop further as more diverse and sophisticated data sources are utilized. For example, the integration of location data will provide deeper insight into consumer behavior and preferences. In addition, the use of data from connected devices via the Internet of Things (IoT) will enable new perspectives on consumer behavior and preferences. In addition, the integration of data on economic indicators, weather, and competitor trends will further improve the accuracy of the model, enabling more reliable predictions.

Artificial Intelligence and Machine Learning Integration

Artificial intelligence (AI) and machine learning (ML) are driving innovation in MMM. By effectively utilizing these technologies, complex and time-consuming processes that were previously done manually, such as data organization, preparation, and cleansing, can be automated, greatly improving the efficiency of data processing. In addition, AI and ML can be used to build advanced predictive models that capture complex market changes and subtle movements in consumer behavior. It can also select and adjust optimal algorithms for complex statistical models.

Application points:

These technological innovations are expected to lead to the development of MMM. Currently, some leading companies have begun to adopt these technologies, but not all companies are yet in a position to use them as standard. With an eye on such technological evolution, it is important to consider introducing new technologies in stages, utilizing current MMM tools and data sources.

2. Real-time response and decision agility

Until now, MMM has not been considered suitable for real-time decision-making or flexible strategy adjustments, but it has evolved into adaptive models and agile analysis methods that make this possible. This makes it possible to quickly respond to market changes and develop effective marketing measures.

Increased frequency and agility

MMM's forecasting capabilities are evolving to be more adaptive and self-learning. The AI-based model continues to learn and improve with each new data it receives. The model also automatically adjusts as the market changes, providing forecasts that are always based on the latest conditions. This makes it possible to adjust marketing initiatives monthly, weekly, daily, and even in real time. With continuous data streams and automated processing, the model is updated more frequently, providing new insights faster.

Enhanced scenario planning and simulation

MMM is also evolving as a scenario planning tool. Through simulations, marketers can try out different marketing scenarios and predict their outcomes. What-If analysis also allows marketers to test the effectiveness of different budget allocations and marketing mix strategies in advance, leading to more strategic decision-making.

Application points:

Real-time response is seen as the future of MMM, but not all companies can achieve it today. There are some services that have adopted it on a limited basis (only for limited channels such as digital marketing), but for many companies, it is realistic to start with basic MMM implementation and operation and gradually aim to move to real-time response. Also, in order to keep up with budget formulation and media planning cycles, quarterly or monthly updates are often practical, so it is important to use it according to your purpose.

3. Improving the convenience and accessibility of MMM

MMM is evolving to be more accessible and easier to use for more companies, making it possible for even small and medium-sized enterprises and companies without specialized technology or knowledge to effectively use MMM.

Reduced Complexity

Efforts are underway to reduce the complexity of deploying and operating MMM. For example, data management platforms and tools are automating the data collection process required for MMM. In addition, some platforms provide pre-built templates to reduce the burden of model development. In addition, extensive documentation, tutorials, and case studies have significantly reduced the learning cost, making it easier to deploy MMM.

Improved accessibility

MMM is becoming more accessible to a wide range of companies, regardless of their size or technical level. For example, the widespread use of open source MMM tools such as Google's Meridian and Meta's Robyn has made advanced modeling techniques accessible. In addition, the provision of industry-specific models has increased, allowing companies in a wide range of industries to use MMM solutions that fit their needs. In addition, the growth of consulting services specializing in MMM has made it easier for companies with limited internal resources to implement and operate MMM. The emergence of cloud-based MMM solutions has allowed companies to use them without the need for large internal infrastructure or advanced technical and specialized knowledge. In addition, many MMM tools offer intuitive user interfaces (UIs), making them easy to use even for users without technical or specialized knowledge.

Application points:

The convenience and accessibility of MMM is a trend that is expected to continue in the future, but not all companies can benefit from it today. The first step is to select tools and services that are appropriate for your company's size and industry and introduce MMM. Take the time to work on improving the convenience of MMM.

Even if you have access to great tools, you still need a certain amount of knowledge to use them more effectively. With our many years of experience and the know-how we have gained from hundreds of MMM projects, XICA has published a guide for marketers to use MMM effectively. We hope you will find it useful.

Download related useful materials here

A Practical Guide to Modern MMM for Marketers
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4. Cross-channel analytics and interoperability advances

MMM is evolving to integrate various online and offline marketing measures and measure the effectiveness of the entire customer journey. In addition, integration with other analysis tools enables more comprehensive marketing analysis.

Omnichannel Marketing Integration

Previously, the mainstream approach was to measure the effectiveness of each individual online and offline measure, but the latest MMM integrates these and evaluates the impact of marketing measures throughout the entire customer journey. This allows for a deeper understanding of the role of each measure and the synergy between channels, and enables detailed analysis of consumers' complex purchasing paths, making it possible to clarify the actual impact of each measure.

Integration with other analytical tools and techniques

MMM provides a more comprehensive view by increasing integration with other marketing analytics tools and methods, such as MTA (multi-touch attribution) andCMM (Consumer Mix Modeling)Combining it with other analytical methods such as these will enable a deeper understanding of marketing effectiveness. In addition, the development of dashboards that integrate MMM insights will progress, allowing multiple data sources and analysis results to be managed in a centralized manner.

Application points:

This is one of the areas where XICA is currently conducting the most research and leading the industry. It is still considered a challenging area for many companies,MMM Solution "MAGELLAN"employs methods such as path analysis that can reflect marketers' hypotheses about the customer journey in the model, making it possible to evaluate marketing measures throughout the entire customer journey (clarifying "where and how much").CMM solution "COMPASS"Through synergy with these two companies, we can elucidate the mechanisms behind consumer brand selection and identify growth opportunities, including who to approach and how to approach them.

5. Integrating sustainability and social responsibility indicators

MMM is evolving into a tool to support the sustainable growth of companies by integrating new indicators, including the measurement of environmental impact and the evaluation of social responsibility, making it possible to balance economic success with the creation of social value.

Measuring environmental impact

In recent years, with growing environmental awareness, sustainability has become a major consideration in corporate marketing activities. In addition to evaluating sales and ROI, MMM has evolved to serve as a means of quantitatively measuring the environmental impact of marketing initiatives. For example, it is possible to analyze the amount of CO2 emitted by offline advertising campaigns and promotional initiatives, and use that data to suggest a shift to initiatives with a lower environmental impact. This allows companies to respond to consumers' environmental awareness and increase their brand value.

Social impact assessment

As efforts toward corporate social responsibility (CSR) and environmental, social and governance (ESG) activities are strengthened, MMM can play an important role as a means of evaluation. By measuring the impact of marketing measures on local communities and society, it is possible to clearly demonstrate the social contribution of a brand. For example, it is possible to quantify the actual social impact of an advertising campaign themed on diversity and inclusion and how it contributes to consumer perception. In addition, by evaluating contributions to local communities and the effectiveness of ethical marketing, it strengthens a company's CSR and ESG, contributing to improving the credibility of the brand. This shows that marketing measures contribute not only to economic success but also to the creation of social value, supporting the sustainable growth of companies.

Application points:

The integration of social responsibility and sustainability indicators is a key element in the development of MMM, but not all companies have implemented them at present. While some leading companies are currently adopting them, many are still just beginning to work in this area. It is important to prepare for the future of MMM by gradually incorporating new indicators.

6. Adaptation to the global market

For companies expanding globally, an approach that takes into account regional characteristics and exchange rate risks is essential. At MMM, we can help you develop optimal strategies for each market by building models that reflect the market characteristics and economic environment of each region.

Consideration of regional characteristics

As companies advance into global markets, it is becoming increasingly important to conduct marketing that takes into account the characteristics and cultural differences of each region. MMM supports the formulation of strategies suited to each region by incorporating economic indicators of each country and consumer behavior data for each region into its models. For example, by reflecting region-specific data such as the mobile penetration rate in Asian markets and online purchasing trends in Western markets, more accurate market approaches are possible. In addition, by optimizing creative strategies that take into account differences in advertising effectiveness and cultural backgrounds in each region, companies can maximize performance in each market. Modeling that takes into account such regional characteristics is an important element in formulating strategies from a global perspective.

Multi-currency support

For global companies, being able to handle multiple currencies is an important marketing issue. MMM makes it possible to build models that take different currencies into account, allowing for more precise measurement of the effectiveness of global campaigns. For example, by analyzing the impact of exchange rate fluctuations on advertising effectiveness, it is possible to make accurate comparisons between different markets. Strengthening multi-currency support like this is an important factor in increasing the competitive advantage of companies aiming for global expansion.

Application points:

Adapting to the global market is an important issue for the development of MMM, but not all companies can do it immediately. For many companies, it is more realistic to start by using MMM domestically and then gradually adapt to the global market. By gradually incorporating regional characteristics and the need for multi-currency support, you can prepare for future global expansion.

Summary

The future of MMM has the potential to dramatically change our approach to marketing optimization. Advances in artificial intelligence and machine learning are making MMM more efficient and accurate, including the ability to provide insights in real time. In addition, improvements in data management and the widespread availability of user-friendly MMM platforms will make MMM more accessible to many businesses, including small and medium-sized enterprises. By leveraging these technological innovations, marketers can get the most out of MMM and deliver more effective and impactful marketing strategies.

There are many possibilities for the future development of MMM, and there is no single "optimal solution." We can expect an increase in data, advances in the technology to process it, and the evolution of marketing methods to match market changes and consumer behavior, but the functions and approaches required for MMM differ depending on the industry and company. In other words, future MMM will need to be adaptable to flexibly respond to diverse needs.

XICA studies data science on a daily basis to make our business more efficient and effective.MMM SolutionIn addition, we provide specialized consulting services in data-driven marketing and analytical solutions that complement MMM.CMM (Consumer Mix Modeling)", and as an industry leader, XICA is leading the way in the marketing of the future.

If you are interested in learning more about MMM and how it can be applied to your marketing activities in the lead-up to data-driven marketing, please feel free to contact us.the Inquiry FormPlease contact us at

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