Advances in Marketing Mix Modeling Unlock Secrets for Achieving Brand Growth. Are CMOs Ready to Commit?
Short CMO tenure is due to failures to deliver growth. Do CMOs really, really want to succeed? If so, what's required?
Credit: Bruce Eric Kaplan, The New Yorker, The Cartoon Bank
“Build a better mousetrap, and the world will beat a path to your door,” goes the expression. Unfortunately, this is not true. The US Patent Office lists more than 4,000 patents for mousetraps, but if you go to your local hardware store, the big seller is still the old, messy Victor, invented in 1894, which has certainly been much improved on. Old habits die hard, and individuals stick to what they know rather than take a risk on something new.
“The difficulty lies not so much in developing new ideas as in escaping from old ones,” observed John Maynard Keynes.
Mutinex, the advanced Marketing Mix Model (MMM) developed by Australian Henry Innis and commercialized in the US by Mutinex’s President, John Sintras, represents a major breakthrough in AI-driven marketing modeling.
“The biggest problem in marketing today is proving the value of marketing,” remarked Sintras in a recent interview with C-Suite Blues.
“How does the CMO validate that the decisions he / she is making on spend and mix for the media and creative agencies will actually grow the business? Too many things are being measured, but they are not the right things. Clicks? Awareness levels? All well and good, but the simple fact is this: legacy brands are not growing and have not grown for the past 15 years. The measures being used are all positive, but brand growth is not there. That fact needs to be faced honestly. The only measure that means anything is the measure of brand growth.”
“One of the big shifts over the past 10 years is the shift away from brand building, the shift away from Big Ideas, the shift towards personalization and performance marketing. It all sounds good, but brands have to fill the top of the funnel. Marketing is not creating enough desire. Marketing is not getting potential customers and likely buyers into the top of the funnel. Marketing is not creating interest in brands. That’s what Mutinex is telling us from its extensive analysis of marketing priorities and spend.”
Mutinex uses a “Bayesian hierarchical model methodology” which is capable of pulling together the marketing data for a brand and creating an understanding of “how marketing works” for the brand — and how successful its media tactics are. Included in the data are measures of price, distribution and creative executions.
“If you really want to grow,” says Sintras, “then you need to be looking at your insights and tactics every month — and understand what opportunities exist to optimize and grow off the back of those insights. You need a ‘growth copilot’ to bring your fragmented marketing efforts together and give you an integrated picture. It is not enough to know what each individual marketing piece is bringing to the party — what the search initiatives, the social initiatives, the programmatic initiatives, the TV initiatives and the others appear to be doing. You need, instead, to know what the whole package is achieving. That’s what we set out to do with Mutinex.”
The fragmented organization of Marketing Departments poses a problem for CMOs. Each specialist in Marketing has a budget and tactics, and each individual tries to optimize and show how his / her specialist area is succeeding. Ironically, every specialist area can appear to be a success, at least by the measures that are employed…but brands can still fail to grow, which is the case today.
“There’s too much fragmentation and complexity in Marketing,” asserts Sintras. “You need to see if you’re overinvested or underinvested in certain areas and rebalance the priorities. This is an impossible task for the CMO if he / she is dealing with a fragmented organization and getting feedback from a dozen or so specialist individuals. Everyone protects his / her own turf. The CMO needs a unified and integrated look at the marketing picture. And the only criterion is “what package of initiatives will deliver growth….not just the clicks or other measures used by the specialists in marketing.”
One of the problems, though, is that CMOs are battered individuals in their organizations. They turn over twice as fast as their CEO bosses. All the surveys of CMO performance reveal that turnover is due to their lack of achievement — they spend gobs of money (much to the displeasure of CFOs and Procurement) and fail to deliver growth, even though the measures of performance that they tout look positive. This creates a credibility problem for Marketing.
“CMOs are undoubtedly under pressure, but ironically that makes many of them risk-adverse. Mutinex is a better mousetrap, but it requires a growth-committed CMO to take on an innovation that identifies the pathways for better growth. There are many CMOs in the marketplace who are not really committed to growth — it’s too scary a measure. For us, though, we’re interested in working with those who really want to grow. We’re created a tool that will give them the insights they need to achieve genuine brand growth.”
One important part of the Mutinex tool is Hendren, the AI up-front piece that allows any CMO to ask, in plain English, what spend levels and mix are required to achieve a certain objective. “Hendren makes it super-easy to ask questions in simple language and have Mutinex deliver very comprehensive summaries of results and optimization recommendations in under a minute. An MMM innovation should be easy to use for C-Suite Executives — they should be able to ask a question of the program and get an immediate answer. Once the program has been fueled with data, then the only skill needed is ‘what are the best questions to ask?’”
Marketing Departments, used to working in a fragmented way, can now come together and work under one single “growth banner” — sitting together in a unified way to ask questions about how brand growth can be achieved.
Will it be adopted by marketers broadly across the industry? “We hope so,” said Sintras. “We keep on adding features to make it easy for any Marketing Department to use, but of course, the early adopters will be those CMOs who are really committed to growth — those who want and need to grow their brands and show their C-Suite colleagues that they really do know what works in this complicated media environment. With their success, the rest of the marketplace will follow, and yes, Mutinex will be adopted broadly across the industry.”
Build a better mousetrap, and the world will beat a path to your door. Given the moribund state of legacy brand growth, the marketing world needs something new.
Will CMOs step up to the challenge? “We’re making good progress,” said Sintras, “but it’s a huge marketplace. We have our work cut out for ourselves.”