Unlocking the Power of Marketing Measurement: A Guide to MTA, MMM, and Commercial Analytics

Marketing measurement is critical to understanding the effectiveness of your marketing programs. But with so many methodologies available, it’s hard to choose which one is best for your organization. This post will explore the pros and cons of three popular marketing measurement methodologies: Multi-Touch Attribution (MTA), Marketing Mix Modeling (MMM), and Commercial Analytics.

Multi-Touch Attribution (MTA)

MTA is a method that looks at the touchpoints of individual users to predict their next action. It's a popular approach among digital-first companies because it tracks digital activities on owned web properties. The downside is that MTA is incomplete, not privacy-safe, and it’s not future-proofed. For MTA to work, marketers need exceptionally good data. Due to privacy regulations, cookie deprecation, and the increase in walled gardens, this level of data is not easily available, which makes it near impossible for brands to stitch together a single, unbiased view of the customer on owned and earned channels, across the entire funnel. With significantly limited data, MTA models have become unreliable and untrustworthy. MTA is also incomplete because it doesn't account for non-addressable marketing channels (such as TV, radio, print, product placement, and in-store advertising) nor does it consider the impact of external factors like economic conditions, competition, or seasonality. Attributing too much credit to digital lead generation activities can lead to underinvestment in critical brand and top of funnel nurturing activities.

Marketing Mix Modeling (MMM)

MMM is a statistical, econometrics approach that analyses sales and marketing data to forecast the impact of future tactics based on historical data. It's a good approach to measure the impact of long-term marketing initiatives, including upper-funnel activities such as brand marketing and video marketing. However, MMM is slow to provide results and recommendations and does not consider factors outside of marketers' control. It doesn’t adapt for today's complexity, and it doesn’t match the speed of business. Marketing mix modeling made some effort to use data in an impactful way but did not go far enough.

Commercial Analytics

Commercial Analytics is a newer, multi-dimensional, statistical approach that measures a wide array of marketing, business and external data to produce compelling growth plans with measurable results. It's predicated on the assumption that organizations’ growth is highly impacted by external factors so the only way to get a holistic view of marketing’s effectiveness is to look at the commercial business as a whole. Commercial Analytics includes product data, customer data, marketing and media data, retail data, operational data and financial data in the analysis. It also incorporates a wide array of non-marketing data such as economic conditions, category demand, seasonality, competition and more that are out of the marketer’s control. Combined, this gives companies a single source of truth. It sheds light on the effectiveness of every business driver, and marketing’s contribution to growth.

Commercial Analytics also helps identify trends and gaps beyond just marketing, enabling organizations to adjust or pivot their growth strategies effectively. For example, it can help finance teams forecast sales more accurately and help marketers protect budgets to achieve growth goals. It can help product teams plan product launches and coordinate marketing campaigns and plan for inventory challenges. It can also help retail teams measure the halo effect between sales channels to drive optimal investment strategies. It goes beyond marketing to evaluate all commercial levers.

Choosing the Right Methodology

So, which methodology should you select? Ultimately, it comes down to your organization's needs. MTA might work if you are a smaller organization with heavy digital focus. For organizations with a longer-term perspective, MMM provides a top-down view of your marketing initiatives. However, for marketers that want to drive organizational change and prove marketing’s impact on revenue, Commercial Analytics presents a compelling alternative and provides a more comprehensive, holistic view with actionable insights in the short-term.

Marketing measurement is an ongoing process, and it's crucial to use a methodology that internal teams will adopt and accurately measure the impact of growth initiatives. Gartner found that today, only 53% of marketing decisions are influenced by analytics. It’s no surprise that internal adoption is a critical piece of the analytic methodology you chose. While MTA and MMM have their advantages, Commercial Analytics is emerging as the preferred choice for marketers who want to provide value and drive revenue growth in their organization. By understanding the benefits and limitations of each methodology, you can make an informed decision and unlock the power of marketing measurement for your organization.