Marketing Mix Modeling

Statistical Model

  • Defines How Marketing Spend Is Related to Sales.
  • Uses Regression Technique.
  • Effect of Marketing Channel and Campaign to Sales, ROI And ROAS.
  • Captures Non-Linear Ad Stock Variables with Diminishing Returns.
  • Optimize the Spending Budget for Each Channel with Channel Simulation.
  • Channel Level Spend Optimization - Provides the Environment to Allot.
  • Channel level spend optimization - provides the environment to allot budget to channel to reach sales target in optimized ways
  •  Marketing Response Curve(S-Curve) - finds the min-threshold and max-threshold of spend for each channel
  • formula:
  • sales = baseline_sales + coefficient*spend_in_channel_1 + coefficient*spend_in_channel_2 + ...
  • Baseline Revenue(sales) – when no marketing spend is done in any channel, the default sales the company can receive
  • Contribution – Incremental Sales produced from each marketing tactics Each coefficient says the rate of change sales for every unit change in marketing tactics.
  • Eg: Incremental Sales for channel_1 = coefficient*spend_in_channel_1