MMM Budget Optimization: How to Allocate Marketing Spend

The marketing mix model (MMM) gives you a response curve per channel—whether it's a Michaelis-Menten or Hill function that relates spend to outcome. But having those curves is only half the equation.

Once those curves are fitted, the optimizer's job is to answer one critical question:

"Given my current market conditions, response elasticities, and total budget, how should I reallocate spend across channels to maximize efficiency?"

This is Part 1: conceptual framework and methodology. For practical scenarios with step-by-step code examples, see Part 2: Practical optimizer scenarios.