A step-by-step guide to calibrating marketing mix models with experiments

Calibration is the process of aligning marketing mix modeling (MMM) with a causal, ground-truth measurement such as experiments.

1. Understanding the importance of calibration

The ability to accurately measure the incremental impact of all marketing and non-marketing activities is crucial for informed decision making. Marketing Mix Modeling (MMM), a decades-old technique, has re-emerged as a popular approach to estimating incrementality and quantifying the effectiveness of various channels due its holistic nature, as well as flexibility, robustness and customizability.

To minimize human bias and ensure accuracy, reliability and validity of MMM, calibration plays a vital role. Calibration is the process of aligning the model with a causal, ground-truth measurement such as experiments. Experiments are the practitioner’s fundamental tool for...

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