The Budget Optimization module in the MMM framework focuses on helping marketers answer two critical questions:
“What could have been done differently in the past?” and “What can be done differently in the future?”
Using insights from MMM models, the session explains how to optimize budget allocation by shifting spends from low-performing to high-performing media channels—maximizing returns while keeping the overall budget constant or adjusting it strategically.
Key topics covered include:
Types of Optimization Scenarios:
Same Budget Optimization: Identify unrealized gains within existing budgets.
Increased Budget Optimization: Understand how additional spending could improve outcomes.
Target KPI Optimization: Determine the minimum budget needed to hit a specific target.
Execution Methods:
Manual approach using Excel solvers.
Programmatic optimization with tools like NLOPT for nonlinear, constraint-based modeling.
Best Practices:
Align optimization with saturation curves to validate if reallocations follow expected media response behavior.
Handle constraint floors and ceilings carefully to avoid unrealistic shifts in media spend.
By the end of this session, participants will be able to conduct practical budget optimization exercises and translate MMM insights into data-driven, actionable strategies that boost marketing ROI.
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