How Does Marketing Mix Modelling Work?

Katie Holmes
11th May 2022

We’re going to show you how marketing mix modelling works, why it’s needed, plus the pros and cons of using it to assess your marketing efforts.

If you’ve been looking for a straightforward guide to marketing mix modelling (designed for marketers), this is for you.

Marketing mix modelling (MMM) is a complex topic.

But once you understand it, you’ll want to implement it into your own marketing strategy. 

For this article, we’ll discuss: 

Pro Tip

Ruler makes the process of attributing revenue to your marketing easier. It tracks data on a visitor level, allowing you to successfully attribute leads and marketing-generated revenue across multiple campaigns, ads, keywords and more.

How Ruler attributes revenue to your marketing

What does marketing mix modelling do?

Marketing mix modelling, or MMM, is the act of taking any activities that could influence sales numbers and then applying statistical modelling to show how marketing contributes to changes in sales volume.

It breaks down your results by channel, allowing you to see which marketing activities are having the most significant impact on your ROI.

Unlike attribution modelling, marketing mix modelling attempts to measure the influence of less measurable marketing channels, such as TV, radio, and newspapers.

Why is marketing mix modelling used?

You know what it feels like to put together a report for your CEO, investors or clients. 

It’s hard work.

You need precise data so that you can justify your conclusions and prove why you deserve a bigger marketing budget.

Marketing mix modelling combines all of your activities and shows the effect it’s having on your revenue.

This could span from an offline campaign promoting a half-price sale, or a piece of content that went viral on Facebook.

MMM enables you to track elements such as:

With marketing mix modelling, you’ll have data linking your sales back to your marketing efforts.

You’ll gain a clear picture of your marketing wins (and losses), so you can improve and optimise your marketing strategy going forward.

What are the benefits of marketing mix modelling?

We’re sure you already have methods of finding insights in your marketing data. But, it’s never easy. Let’s take a look at the areas where marketing mix modelling helps.

Offers a complete analysis of your marketing results

You’ll be able to see the results that every marketing channel delivered.

Not only that, but you’ll be able to see the impact that non-marketing related factors had.

For example, seasonal changes, or changes in general user behaviour.

Marketing mix modelling quantifies everything. So, you’ll have real numbers to back up your reports.

It’s important to note that you won’t have data on different campaigns within channels (we’ll talk about the limitations of MMM below).

Provides high statistical reliability

Another benefit of MMM is that it’s statistically reliable.

After all, it’s based on an extensive data set, and you’re applying proven statistical modelling methods such as regression analysis.

What are the limitations of marketing mix modelling?

Unfortunately, there are limitations to marketing mix modelling. So, it might not be ideal for your marketing strategy. Let’s see why.

Designed with traditional marketing channels in mind

Marketing mix modelling was traditionally used to look at the impact of marketing tactics like:

Marketing mix modelling doesn’t account for variations in messaging and creative used to target different audiences.

It only provides a top-down view.

A top-down view is nice to have, but it won’t show you an accurate picture of your individual campaign performance.

Because MMM shows averages over time, it ignores peaks and troughs.

For example, if your company was featured in TechCrunch and saw a huge traffic spike (that slowed down after a few days), your results would show an average for the whole period, and not account for the impact of a single media mention had at the time.

It can make specific channels look like they perform better on average than they usually do, because of rare events.

Too complicated for small teams

Unfortunately, not all teams will have the bandwidth to use marketing mix modelling.

It requires knowledge of statistics to be done well.

If your company is small or doesn’t have anyone with knowledge about statistical analytics, then it’s probably not worth trying in-house.

You could work with a qualified external company, agency, or freelancer, and they’ll walk you through the process.

But, that will cost you a lot of time and money.

No guidance on making changes

Another downside to MMM over other marketing analysis methods is that you will get statistical data, but won’t receive any feedback on how you should make changes.

Considering marketers have access to tools that help us attribute our efforts to revenue, it’s worth considering if your time is well spent on MMM.

In many cases, using the tools you already have to gain insight into what’s working would be a more effective use of time.

What’s an alternative solution to marketing mix modelling?

Even though we’ve provided more limitations of marketing mix modelling than strengths, don’t dismiss it entirely. 

If you regularly run offline marketing campaigns, marketing mix modelling remains a viable method for assessing your performance.

But if your main focus is to track the digital footprints of your consumers, then there is an easier way to tie your revenue back to your marketing efforts.

And, you don’t need knowledge of statistical analytics either. 

Marketing attribution tools like Ruler let you see how all of your channels, both online and offline, are performing and how well they impact your conversions and sales.

Where Ruler comes into its own is that it can completely automate the process.

That’s right.

Unlike the time-consuming MMM process, your data can be displayed in real-time and will account for all of your channels, campaigns, messaging, and any other marketing tactic you’re using.

Let’s take a closer look at how it works together.

Tracks anonymous visitors over multiple sessions and traffic sources

First, Ruler tracks each and every anonymous visitor to the website. It will ensure that your data is captured on a visitor level so it can match any leads, conversions or sales back to the marketing touchpoints that generated them, across multiple channels, ads and keywords.

Related: How to view full customer journeys in Ruler

how does marketing mix modelling work -

Ruler Analytics visitor report

Sends your marketing and conversion data to the CRM

Whenever a visitor converts into a lead, the visitor-level analytics matches their marketing touchpoints to their conversion details.

If you’re managing a campaign that targets an offline audience, then you can still achieve this by using Ruler’s call tracking.

For this demonstration, however, we’re going to stick with forms.

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Ruler Analytics forms report

Once the Ruler has matched up the lead with their marketing touchpoints, you’ll then need to pass that data onto your CRM.

You can also achieve this using Google Sheets.

Related: How to use Google Sheets to track sales leads

Here, you’ll be able to connect your marketing and conversion data directly to your customers.

Below is an example of what the conversion and marketing data would look like in Pipedrive.

How does marketing mix modelling work -

Pipedrive CRM

Track the quality of your leads in the pipeline

Naturally, your leads will progress through the pipeline, going from simple contact to a fully qualified sales opportunity.

Ruler lets you know where your leads are at the various stages of the pipeline, allowing you to plan and optimise your marketing well in advance.

For example, here is a screenshot of Ruler, providing us with key information at different stages of the pipeline. 

In the example, you can see Google Ads is responsible for driving £28,295 to the proposal stage from a last-click perspective, whereas Google Organic has only added £7,695.

Based on this insight, you could allocate more spend to Google Ads to convert leads for sales to close into revenue.

Attribute revenue data to your marketing sources

Some leads will fall through the cracks, and others will convert into a deal or sale. 

In the event of a won deal, Ruler will scrape the revenue data and attribute it across the customer’s touchpoints. 

Related: How does Ruler attribute revenue to marketing

This allows you to see which marketing channels have had the greatest impact on your revenue metrics and goals.

Attributes revenue and marketing source data to the tools you love

Attributing revenue to your marketing sources in Ruler is just the beginning.

Ruler integrates with almost any tool, allowing you to track your marketing attribution and revenue data in the applications you use every day. 

Let’s take Google Analytics, for example. 

With the Ruler and Google Analytics integration, you can report and view revenue data throughout the Google Analytics reporting suite for web forms, phone calls and live chat enquiries. 

Related: How Ruler enriches your attribution reports in Google Analytics

Here you can see which marketing sources not only drive the most conversions but revenue too.

At Ruler, we use our platform and ChartMogul to track and report on monthly and annual recurring revenue driven by our marketing activities.

Related: How Ruler uses ChartMogul to close the loop between marketing and revenue

In ChartMogul, we’ve set up custom fields, and marketing source data is passed from our platform and CRM.

This integration allows us to track our monthly and annual recurring revenue segmented by lead source, allowing us to measure: 

After a quick and easy setup, you’ll have access to all of the information you need to attribute your efforts to revenue and can go into your next marketing meeting with confidence.

There’s so much opportunity that you can get out of Ruler.

But let’s say, at the end of the month, you populate a report showing how much revenue you generated and which marketing touchpoints prospects interacted with the most before converting.

You may see that 90% of your revenue comes from customers who discovered you through a Google Ad campaign.

On the other hand, while you get a lot more traffic from Facebook than Google Ads, only 10% of your revenue comes from your social media marketing initiatives.

With Ruler, you will see that your social media campaigns are underperforming in terms of revenue growth.

You decide to double down on Google Paid and slow down your social paid advertising, and the next month, you see a positive movement in sales.

What’s the final verdict on marketing mix modelling?

Marketing mix modelling is a statistically reliable way to track marketing effectiveness, but it falters when you’re running online campaigns across multiple channels, with numerous variants of messaging and creatives.

MMM isn’t designed to handle that level of detail.

It has several limitations that limit its effectiveness for marketing teams.

If you’re looking for a marketing reporting system that unifies data across online and offline channels and links your conversions directly to revenue, then Ruler is for you.

Ruler allows you to access revenue data and link it directly to your marketing activities without any of the headaches involved in marketing mix modelling.

Want more information? Learn everything you discover in Ruler or book a demo to see it in action for yourself.

book demo - revenue attribution -

This article was originally published in February 2020 and was last updated on 23th May 2022.