Marketing mix modeling best practices: Understanding why regional data delivers more accurate results than national data

Organizations have been placing increasingly more emphasis on making data-driven marketing decisions in recent years. Especially since the onset of COVID-19, the demand for insights on how to craft the optimal marketing budget allocation plan has risen markedly. Marketers rely on guiding principles like Marketing Mix Modeling (MMM) to determine which marketing channels will drive the highest return and optimize marketing budget allocations to maximize business outcomes. However, a recent study from Nielsen that analyzed 19 MMM studies in Japan found that the accuracy of a MMM varies significantly depending on the granularity of the data that is input into it, including country- and regional-level sales and marketing data. Even with the small sample of MMM studies, we found clear evidence that MMM is more accurate and reliable when it uses regional data instead of national data. Whenever data is available, we strongly recommend marketers to conduct MMM analysis at the most granular geographical level.

Marketing mix modeling best practices: Understanding why regional data delivers more accurate results than national data