RIP Marketing Mix Models: For Healthcare, It's Time To Move Past The 'Tried And True'

Marketing mix models (MMM) are considered a time-tested method for determining media placement effectiveness, but that effectiveness is being called into question as data availability evolves, consumer behaviour shifts, and new methodologies to capture those shifts present themselves as alternatives.

MMMs basically mine data to predict the return on investment for marketing dollars spent. They use a complex equation that uses historical information as a base, adds other variables such as promotional activity or seasonality, and then, based on that history, predicts the future impact on sales.

This works fairly well for consumer goods (where the practice started), but less so for health and pharmaceutical companies looking to reach a consumer that doesn't conform to models built on composites. Industries like health and pharma—two industries our agency primarily servestypically have few factors in play that make history an imperfect predictor of the future. In health, each person's health need, illness, diagnosis and treatment is unique, making it much harder for marketers to create and deliver messages for optimal returns and to land on that perfect tactical mix to maximize brand performance. And because of privacy laws in health, details about our customers aren't available in the same way they are for, say, toothpaste or soda.

Nevertheless, health brands have relied on MMMs in the absence of more customized solutions. This is changing, however, as new data-gathering techniques, programs and platforms hold promise. But embracing them will take some courage and creativity. Marketers have the latter in spades, but our methods are so rooted in carefully cultivated models, that courage can be difficult.


If we're not taking note of real-time behaviors, marketplace circumstances and insights, then we're falling short of capturing the full picture. And if we're not capable of creating or using new ways to allocate marketing dollars, then health brands are in danger of missing opportunities.

Shifting like this can be really challenging for brands, particularly when it comes to allocating marketing budgets. It can seem like an expensive risk that extends beyond a single campaign, putting brand equity and market share at stake, but sometimes you have to be bold!

Diminishing Returns

MMMs are based on set behaviours, and even if the models are current and accurate, they don't always take into account two very important things: the level of noise in the market to a given patient set (competitive) and the distribution of touchpoints by audience segment (frequency). These factors can quickly lead to diminishing returns. And in the health space, categories can quickly experience fatigue with older, more traditional models that favor high-reach, high-frequency channels versus more targeted approaches to media. 

For every dollar allocated, you reach a certain point in time where every incremental dollar becomes less effective. You might gain a bit more impact, but eventually, you've reached a saturation point with consumers. Viewers have already seen the ad, and if they haven't responded already—and there's numerical proof of this—they likely won't. MMMs rarely account for this dynamic when it comes to building effective communications strategies against small segments of the overall U.S. population. 

Why not embrace change in small ways to start? Take 20% of your traditional marketing spend and put it someplace different. Lean into learning. Often these uncharted territories lead to more incremental gain than simply doing even more of something that has worked in the past because, in all likelihood, you're exposing yourself to new people who have not yet reached that same point of fatigue.

The Past No Longer Predicts the Future

Last year was a hard reset in how consumers accessed information about health, what type of health information they wanted, and the channels through which it was all accessed. Modeling future consumer behavior on the past isn't effective, especially in health and particularly in the time of Covid-19. Past behavior has been turned on its head in so many ways, our heads are actually spinning.

Telehealth has supplanted in-person visits, rerouting the path to information and communication channels used in modeling. Interest in health issues has changed dramatically, as well, as consumers delay treatment for existing conditions or develop new symptoms and fears in physical isolation.

Then there are the changed media habits that have been accelerated as viewing shifts to and explodes on streaming services, digital content, and emerging social media platforms such as TikTok.

We know that advertising over the air is a great way to reach the largest number of consumers, but it is not the safe bet it once was. There are just too many options. And depending on the demographic a brand is trying to reach, we find that the audience has diverted its attention elsewhere as viewers are increasingly channel-agnostic. Other industries have been quicker to pivot to some of these behaviorally driven changes, and healthcare should take note.

But the rise of new platforms and services presents an exciting opportunity for health marketers.

Changing media habits and the shift to streaming services, digital content, and emerging social media platforms are opening doors and presenting opportunities to connect with customers in more intimate ways—ways to truly be disruptive. They are the kind of media worth allocating that 20% of your marketing spend to.

If anything, I hope this past year has galvanized marketers to retire some old ways and be more intentional in how and where they show up. Being cognizant and receptive to the unique experiences and behaviors of individuals will be key to cutting through the noise and building trust with our audiences.

Previous post
Back to list
Next post