MMM Budget Optimizer

Overview

The MMM budget optimizer suggests options for distributing your marketing budget across channels, based on your budget limits and goals. It runs on a marketing mix model (MMM) that Improvado builds on your marketing data collected in Improvado.

Use cases

• Find where the next dollar works best - see which channel brings the most effect from additional budget.
• Rebalance the current budget - redistribute spend across channels without increasing the total budget.
• Test a budget shift before making it - for example, check what happens if you move 20% of the budget to CTV.

How it works

The MMM estimates how each channel responds to spend. It is a Bayesian model, so every estimate comes with a credible interval that shows how certain the model is. The model takes into account:

• Saturation - additional budget brings less and less effect.
• Carryover - how long the effect of advertising lasts.

The optimizer uses these dependencies, your budget limits and your goals to suggest options for distributing money across channels. It keeps the total budget the same and keeps each channel within the range of spend it has had historically.

As a result, you get:

• Suggested allocation - how to distribute the budget across channels.
• Marginal ROI - the return from the next dollar spent in each channel.
• Saturation curves - how the effect of each channel changes as its spend grows.

Scenario planning

The what-if planner lets you set an objective, budget constraints or a target ROI, and compare how different allocations are expected to perform before you change the budget.

How to get access

The budget optimizer is in Closed Beta and is available as an additional service under a separate contract. Contact your Customer Success Manager: the Improvado team will check whether your data is enough for a model, and your CSM will discuss the terms of the service with you.

For user-level attribution, see Improvado Attribution.