An MMM Advocate’s Plea: Use Your Data for Better Budgeting in 2024

If you have two years’ worth of solid advertising spend and revenue data, and you’re planning your 2024 channel budgets according to your usual methodology, please take three or four minutes to hear me out.

TL;DR: run media mix modeling, or MMM. Use Meta’s Robyn - it’s free. If you don’t have in-house resources, hire someone to stand up the integration; whatever you spend will have a fantastic ROI.

Why?

These are the flaws MMM, which is signal-resistant and favors no channel over another, will correct:

• You won’t rely on click-based reporting, which is often skewed or incorrect and ignores the halo effect of upper-funnel views, impressions, etc.

• You won’t be subject to the fuzzy math produced by channel-specific reporting, where each channel tries to claim more credit than it’s due. You’ll get a holistic, unbiased view instead (even though Robyn is a Meta product).

• You won’t overcredit low-incrementality initiatives such as brand search and Facebook remarketing, and you won’t undercredit prospecting initiatives.

• You won’t ignore incrementality anymore, which is to say you’ll understand the actual value driven by an engagement.

• You won’t keep your channel spend proportions static as your budget changes (check out an example of how they should change):
  
  

MMM is by nature more analytical than predictive; it’s great at helping you understand the value of past campaigns and leading you to extrapolate future budgets from there, which is why you need two years of data as a base. But let’s say it gets you to 85-90% of an optimal budgeting state – that’s so far beyond most brand setups we inherit that it doesn’t take much of a budget to pay for itself in very short order.

You still need to understand how to leverage bidding and targeting to optimize the budget within channels, of course, and you need a good, varied supply of creative to fuel your efforts. With a solid MMM setup backing all of that, your marketing performance might surprise you (and your executive team).

Sad-trombone coda: if you don’t have enough historical data to use MMM, I’d recommend using recent click-based reporting instead (from GA, Salesforce, Shopify, etc.) to assess performance across channels, and determine adequate channel budget from there. And make sure you’re recording your spend and revenue accurately enough to put MMM in reach sooner rather than later.