Essential Ingredients of An Effective Market Mix Model

The rise of digital marketing at the dawn of the 21st century led to questions like: How do we decide on which channels are performing better than others? How do we objectively allocate marketing dollars to various channels? The answers proposed were in the form of x-click contributions such as: Last Click Contribution, First Click Contribution etc. With time it was realized that these multi-touch attribution models deviated from the reality because they lacked firm scientific rigor. The Multi Mix Modeling technique that had been around for a long time is now being applied to digital marketing to overcome the shortcomings of the attribution model. However, the challenges lie in balancing the need for scientific rigor vs. the expenses needed to create and maintain these models. We discuss some of the techniques being used in the the Multi Mix Modeling space, and the associated challenges.