For years, marketing leaders have had to make big budget decisions using backward-looking, static models. Now, in a fragmented media environment, and with growing pressure to prove financial impact, those tools no longer pass.
"CMOs are now required to quantify financial impact, balance brand building with short-term ROI, manage a fragmented media landscape and incorporate price sensitivity and macro conditions like politics — and do all of this in a privacy-compliant way," says Jaco Lintvelt, MD of Incubeta SA.
"Holding onto old ways of measurement in a constantly changing environment is no longer an option," adds Lintvelt.
Moving On With MMM
Lintvelt explains that advanced MMM is designed to address these challenges. Instead of looking at isolated channel metrics, it measures true incrementality, separating baseline sales from incremental sales, so CMOs can see which channels, combinations and spend levels actually move the needle.
AI and real-time data collection are also reducing the latency that used to make MMM feel like a purely retrospective tool, where marketers had to rely on data that was three to six months old, says Incubeta.
With this in mind, Google launched Meridian, an open-source MMM last year. It uses Bayesian causal inference that allows users to blend prior knowledge with real-world data to reveal the true incremental impact of marketing efforts, adds Incubeta.
"Today, real-time search query data, digital behaviour signals and social sentiment can be fed into models that continuously update their view of performance. If a campaign is going viral for the wrong reasons, AI can detect negative sentiment early, allowing teams to pivot or pause before the impact shows up in financial reports weeks later," says Lintvelt.
But if the benefits of advanced MMM are so compelling, why hasn't every CMO already made the shift?
It's Not as Easy as it Seems
Lintvelt is careful to say that South African CMOs are not necessarily resistant to implementing modern MMM solutions, but rather that many brands face challenges.
"Firstly, many local brands face data hurdles. Sourcing the right information, cleaning it and structuring it properly for modelling, often while being weighed down by technical debt and legacy systems, can leave leaders breathless. We see so many companies that are able to move data from one place to another, but lack the capability to prepare it for analytical intent," explains Lintvelt.
Secondly, Lintvelt points out that MMM is, by nature, a long-term strategy. It typically looks over a horizon of one to two years, which can clash with (unreasonable) expectations of immediate, week-by-week results.
As with so many new technologies in marketing, a profound skills gap also needs to be overcome, says Incubeta.
"Because MMM sits in the AI and econometrics space, teams will need people who understand technical modelling, and marketers need to be comfortable with probabilistic outcomes instead of simple last-click logic," adds Lintvelt.
Finally, for industries like financial services, steep compliance requirements may scare off marketing leaders. However, in this regard, Lintvelt is quick to allay concerns.
"This tech is privacy by design. Instead of consuming identifiable CRM records, MMM works on aggregated, anonymised data, not a line-by-line view of individual customers. The outputs are also aggregated, expressing incremental lift by channel rather than identifying specific people to target. In other words, the model helps allocate budgets, it does not create profiles for direct marketing, which is what POPIA seeks to constrain," says Lintvelt.
The final question then, is how to take advantage of advanced MMM, without breaking budgets.
Advanced MMM Does Not Replace Human Judgment, It Sharpens It
"Before the first model is built, organisations need to design how they will capture media activity and outcomes, and what external variables matter in their specific industry — from weather for apparel retailers to macro-economic indicators for banks. That scoping work is what makes later modelling reliable," Lintvelt says.
On the skills side, he says the most pragmatic path is a blend of focused expertise and broad literacy. A relatively small group of specialists who can do the heavy lifting, along with marketing and commercial teams, can be upskilled through targeted education, and working with partners who can show them the ropes and who have all the required skills and experience.
For local CMOs under pressure to prove every rand of spend, the combination of financial rigour, contextual awareness and privacy-conscious design offered by advanced MMM can help brands beyond the limits of static models and into a future of proactive budget management, concludes Incubeta.
For more information, visit www.incubeta.com. You can also follow Incubeta on LinkedIn, X, or Instagram.
*Image courtesy of contributor