Media mix modeling (MMM) is a statistical analysis technique that helps marketers to determine the

optimal allocation of advertising budgets across various media channels to achieve their marketing
objectives. It involves analyzing historical data on media spend, advertising performance, and other
relevant factors to identify the most effective media mix for reaching the target audience and achieving
marketing goals.

The basic steps involved in media mix modeling are as follows:

Data collection: Collecting historical data on media spend, advertising performance, sales revenue, and
other relevant variables.

Data preparation: Cleaning and transforming the data for analysis, including identifying outliers and
missing data.

Model selection: Choosing the appropriate statistical model to analyze the data, based on the research
objectives and data characteristics.

Model estimation: Estimating the parameters of the model using the data.

Model evaluation: Evaluating the accuracy and validity of the model using various statistical measures.

Scenario analysis: Conducting simulations to identify the optimal media mix for achieving marketing
objectives.

Optimization: Using the results of the analysis to optimize the allocation of advertising budgets across
different media channels.

Overall, media mix modeling is a powerful tool for marketers to optimize their advertising spending
across different media channels and achieve their marketing objectives. By understanding the relative
effectiveness of different media channels and identifying the optimal mix of media spend, marketers can
improve the efficiency and effectiveness of their advertising campaigns.