Over the next few weeks we’re going to go deeper into the role of validation and calibration in marketing measurement. This is the second post in a series of posts derived from our recent webinar. Catch the full event on demand here, and the first post in the series here.
One of the most valuable insights shared during the webinar was the nuanced approach marketers must take when deciding between Marketing Mix Modeling (MMM) and incrementality testing for validation. Both methodologies offer unique advantages, but their applications vary depending on the goals, channels, and data maturity of the business.
Marketing Mix Modeling (MMM): Holistic and Strategic
MMM is often regarded as the gold standard for measuring the combined impact of media channels over time. By analyzing historical data and macroeconomic factors, MMM can uncover insights about how different channels interact and contribute to overall marketing performance.
“MMM is particularly valuable when you want to understand the blended, holistic impact of your media,” explained Eli Hile, Senior Director of Data and Analytics at Tombras. “It allows you to assess how your channels work together to drive results, providing a strategic, big-picture view that is critical for optimizing long-term media plans.”
However, MMM comes with certain limitations:
- Data Requirements: A robust MMM analysis requires extensive historical data, often spanning years. This can pose challenges for newer brands or those launching innovative media strategies without a long track record.
- Rigidity: Because of its reliance on historical patterns, MMM is less suited to evaluate newer channels or rapidly changing tactics. For example, it may struggle to accurately assess the impact of emerging platforms or experimental campaigns with limited historical data.
Despite these constraints, MMM excels in established, high-investment environments. It provides a framework for understanding how major budget allocations—such as TV, paid social, and search—affect overall business outcomes.
Incrementality Testing: Flexible and Granular
For brands exploring new tactics or wanting to answer specific performance questions, incrementality testing offers unparalleled flexibility. By isolating variables and testing the performance of individual channels or campaigns, this methodology can provide granular insights that MMM cannot.
“Incrementality testing is ideal when you’re evaluating newer channels, like influencers or podcasts, where control is inherently limited,” noted Aoun Jafarey, Senior Vice President of Client Solutions & Data Science at Publicis Groupe. “These channels often lack the structured data necessary for MMM, but incrementality testing allows marketers to measure their true impact.”
Incrementality testing is particularly valuable for:
- New Channels: When brands venture into uncharted territory—such as TikTok or influencer collaborations—incrementality testing can determine whether these efforts are driving incremental revenue or merely cannibalizing existing demand.
- Specific Questions: This methodology is well-suited for resolving targeted inquiries, such as, “Is my brand advertising driving new customer acquisition?” or “How effective is my display retargeting compared to my baseline performance?”
- Faster Feedback Loops: Unlike MMM, which relies on aggregated historical data, incrementality testing can deliver actionable insights in shorter timeframes, making it a powerful tool for agile decision-making.
A Strategic Balance
The panel emphasized that the choice between MMM and incrementality testing is not an either/or decision. In fact, the most effective marketers leverage both methodologies in tandem to validate results and refine their strategies.
“In an ideal world, you’d want to use both,” Hile explained. “MMM provides the macro view, helping you understand the overall impact of your media mix, while incrementality testing zooms in to answer specific, tactical questions. Together, they create a more complete picture of your media’s performance.”
Jafarey further elaborated that resource allocation plays a critical role in determining which methodology to prioritize. “Start by focusing on high-spend channels,” he advised. “If you’re investing 25% of your budget in one channel, you need to ensure it’s delivering results. MMM might provide the overarching framework, but testing can validate the nuances, ensuring your biggest investments are truly effective.”
This balanced approach ensures that marketers can adapt their measurement strategies to the complexities of today’s media landscape. Whether assessing long-term trends or the immediate impact of a new campaign, MMM and incrementality testing provide complementary perspectives that drive smarter, more confident decision-making.