Ahead of 2025, advertisers are picking apart their marketing activities to understand which media channels provide the best return on investment. Since it’s the season, former P&G analytical expert John Fix is busting the myth that Media Mix Modeling hates radio.
MMM is a statistical analysis that helps businesses evaluate the effectiveness of different marketing efforts, using historical data to see what works best for driving sales.
Contrary to popular belief, MMM is actually pro-AM/FM. A major analysis by Nielsen found that radio consistently ranks as a top-tier medium for ROI. A recent study by Gain Theory and Ebiquity, which analyzed $2.2 billion in media spending, confirmed that audio platforms like radio, podcasts, and streaming deliver strong short-term and long-term returns. According to the study, every dollar spent on audio generates $3.12 in profit within the first 13 weeks and $6.29 over two years.
However, one of the challenges with MMM is the use of inaccurate data inputs. Many advertisers rely on planned Gross Rating Point data – the estimated amount of ads that will be aired – rather than the actual number of ads that run. This creates a “smoothing effect,” which makes it difficult to accurately track the impact of radio ads. Instead, experts recommend using “as-run” GRP data, which reflects the actual media delivery and provides a clearer picture of how well radio ads are performing.
Nielsen’s Dave Homan also stressed the importance of analyzing media delivery at the Designated Market Area level weekly. This detailed approach helps marketers understand variations in effectiveness across different regions and periods.
For brands running campaigns targeting specific demographics, like African American or Hispanic audiences, it’s important to break down the data to measure performance across different segments. This granularity allows for better optimization of the media mix.
Fix dives into the nitty-gritty details in this week’s Cumulus Media/Westwood One Audio Active blog.
