How a CPG Leader Used Advanced MMM to Identify $75M in Incremental Profit 

Background

A global CPG company with a portfolio of well-known confectionery brands wanted to understand the full business impact of their media investments. Faced with persistently low ROIs, the marketing team sought to prove how their spend was driving both short-term sales and long-term brand health. Specifically, they wanted answers to three questions:

• Which channels were performing best?
• How did channel ROIs compare to break-even points?
• What was the full-funnel value of media that had not been captured previously?

Solution

We implemented a comprehensive measurement program centered on marketing mix modeling (MMM) for three of their leading brands. To deliver a more accurate, full-funnel view, we enhanced our core MMM with three proprietary solutions:

• Our Unobserved Component Modeling (UCM) approach provided brand-specific long-term multipliers, replacing less accurate industry benchmarks.
• Our Integrated Marketing Response (IMR) framework conducted nested modeling, allowing us to measure the indirect impact of media on brand health metrics and link that impact through to revenue.
• Our Gain Theory Interactive decision-making platform was used to simulate and optimize the client’s live media plans, providing a clear, forward-looking path to growth.

Results

Our advanced measurement approach provided clear answers to the client’s key questions and unlocked significant value.

For one brand, the analysis revealed that its Facebook and Instagram investments delivered an 84% higher long-term ROI than previously thought, while for another, CTV and YouTube Video were identified as the most dominant channels for driving long-term returns.

The IMR framework uncovered substantial indirect profit from media’s impact on brand health. For one brand, TikTok and YouTube drove an additional $1M in indirect profit, while for another, the ROI of a key retail media channel was 247% higher than previously measured.

Overall, one of the company’s major brands achieved a 39% year-over-year increase in long-term profit on just a 12% increase in spend.

By using our scenario planning capabilities to optimize the next year’s media plan, we also demonstrated the potential to generate over $75 million in additional long-term profit across all three brands.