Learnings from OG MMM – FMCG/CPG MMM
It is a well known fact that FMCG/CPG industry were the pioneers in adopting Marketing Mix Modeling (MMM). My initial training was in applying MMM to FMCG/CPG marketing effectiveness problems.
In the last few years, MMM has had a renaissance of sorts (courtesy various factors like privacy, cookie deprecation, GDPR etc.)
It is now being readily adopted by many different domains.
Here is how the learnings from FMCG/CPG MMM helped me to apply MMM to different domains.
1. Observing the effect for longer time period
In FMCG/CPG MMM, one typically sees data of past 3-5 yrs. This helps one understand how the various media spends play out in the long run and eventually helps to understand how brand equity is built up over the years.
2. Performance marketing vs Brand Building
Digital focused brands, planning to expand into TV ads can understand what the impact of TV ads look like and how much sales TV is able to drive in the short term vs long term.
3. Price elasticity
CPG brands focus on checking the impact of price changes at different sensitivity level. Brands experimenting with different price points can utilize price sensitivity analysis layered with MMM.
4. Impact of distribution
As they say in FMCG/ CPG, Distribution is everything. Online only brands looking to expand to brick and mortar stores can benchmark their distribution with other brands who already have a strong distribution.
5. Media Planning for the long run
FMCG/CPG utilize learnings from MMM to do media planning for the long run. Other domains too could take a long term view and implement the learnings from MMM accordingly.
