What is Nested Modeling
A nested model represents an interactive relationship between independent drivers and multiple connected KPIs. For example, TV advertising and Paid Search should each lead to an increase in sales, but does TV advertising also impact the performance of Search? That’s where nested modeling comes in. It allows you to account for interaction but still get separate planning ROIs for each tactic. With nested thinking, we recognize that TV has a direct effect on sales as well as an indirect effect on sales (i.e. via driving up search).
Nested Modeling shifts credit via better recognition of the path to purchase
Nested Modeling is often more representative of today’s complex media landscape. By more accurately modeling the way media impacts consumer behavior, we can see the direct and indirect impact of marketing spend. Total ROI and direct and indirect effect curves simplify a complex set of models into one practical planning tool.
Nested Modeling also helps to address nested business structures
For example, many types of subscription-based businesses have multiple goals for marketing, such as to drive new customers and to retain current customers. Nested Modeling allows one to build a set of models that recognize this, hence optimizing spend with a better understanding of the nested relationship between sales outcomes.
How does it change reporting in strataQED?
You will have the option to:
- Select Dependent: Report results just for one dependent at a time, be it an intervening variable, the overall dependent, or a manual dependent (e.g. a combined model).
- Display Effects:
Direct: This will give the same result as you currently get in strataQED; it will not show any nested effects.
Indirect: This will display the direct and indirect effects separately.
Any indirect effects will be removed from the intervening variables and added as a series to the charts/grids.
The remaining intervening variables’ contributions will be displayed as the net impact of that series.
Combined Direct & Indirect: The direct and indirect effects for each activity will be shown as a single series. The remaining intervening variables’ contributions will also be displayed.
Nested Modeling summary
Nested Modeling will assist you in getting the most out of your results by improving speed, accuracy, and providing more insights. It takes you a step above traditional Marketing Mix Modeling:
- Providing you with a comprehensive overview of the relationship between your independent drivers and multiple connected KPIs
- Allowing for quicker and more accurate modeling
- Simplifying evaluations, allowing you to make updates and changes where necessary
- Creating a complete brand picture without the involvement of complex Excel files
Nested Modeling is our newest module that you can add to our strataQED software or purchase separately, just like with the rest of our Marketing Mix Modeling software. Enjoy flexibility!
Looking to learn more?
At ScanmarQED, we’re constantly striving to help you in getting actionable insights that allow you to make smarter marketing decisions. If you have any questions related to nested modeling or any of the other products we offer, please contact us, and we’ll be happy to discuss how they can help you and your organization.