Marketing Mix Modeling: An Origin Story

Marketing Mix Modeling (MMM) has been used to measure the impact of marketing and advertising for around 40 years.

While the exact origins are difficult to pinpoint, MMM emerged in the 1980s as a way to analyze the effectiveness of different marketing activities on sales where there was no direct or deterministic way of doing so. Early adopters were primarily consumer packaged goods (CPG) companies who had the necessary data on sales and marketing spend and had the challenge of tracking sales dispersed across various physical retail channels. Legend has it that Coke was among the very first brands to use MMM in the 80’s. See the masterclass interaction with William (Todd) Kirk, one of industry’s OG MMM scientists discussing history of MMMs.

 

Here's a brief timeline:

1960s

The foundation for MMM was laid with the development of econometric models. 

1980s

MMM gained traction as computing power increased and more companies began collecting detailed data on their marketing activities.

1990s - 2000s

MMM became more sophisticated with advancements in statistical techniques and software.

2010s - Present

MMM continues to evolve, incorporating new data sources (like digital advertising data) and addressing challenges like attribution in a multi-media, multi-channel world.

 

It's important to note that MMM is not a static concept - it is in a constant state of iteration. To be effective on an ongoing basis it needs to continuously adapt to changes in the marketing landscape, incorporating new technologies, media channels and data sources to provide more accurate and granular insights.