Using MMM to bridge the gap between marketing & finance

It’s a tale as old as digital marketing itself. Facebook said we had a £3 ROAS. The finance team said we were breaking even.

You’ve just pumped an extra £100K into platforms in July. The platforms say they have returned you £300k - your £3 ROAS. You diligently report this back to the finance team in August.

Finance says our monthly run rate has gone from £1m per month to £1.1m per month. With gross profit flat at £500k (we’ll take that!!).

This common discrepancy, often leading to mistrust and frustration, highlights a fundamental flaw in relying solely on platform-reported metrics. At Linea Analytics, we understand this problem intimately. Our expertise in Marketing Mix Modelling (MMM) and incremental measurement is designed to bridge this gap, providing a single source of truth that both marketing and finance can trust.

So, why do these discrepancies persist?

The Problem: Platform ROAS vs. Incremental Measurement

The core issue lies in the difference between what a platform claims and what your marketing is actually driving. Platform ROAS is a measure of tracked conversions against ad spend. But what it often fails to account for is incrementality. Did that conversion happen because of your ad, or would the customer have purchased anyway?

• Platform Attribution: Platforms like Meta and Google are designed to give themselves credit. They capture the last click or view before a conversion, even if the customer was already well on their way to buying. They are excellent at demand capture, but not always at demand creation.
• The Black Friday Effect: Imagine running a campaign during a major sales event. Your platform ROAS skyrockets. Is this because your marketing is suddenly 10x more effective, or because there's a massive surge in underlying demand? The latter is far more likely. A platform-reported ROAS of £3 might look great, but if your marketing only contributed £1.50 in truly incremental revenue, that’s a very different story.

This is where a robust MMM framework provides clarity. By isolating the true, incremental impact of each marketing channel. MMM accounts for all other factors like seasonality, economic trends, and competitor activity, to give you an accurate picture of what's working. At Linea, our always-on MMM provides continuous, transparent insights, so you're never left in the dark.

The Solution: Three Steps to Alignment

To overcome these issues and build trust between marketing and finance, you need to align on three key areas:

1. MMM vs. Platform ROAS

Shift your primary metric from platform-reported ROAS to a metric that reflects incremental measurement. Marketing Mix Modelling is the gold standard for this. It moves the conversation from "what did the platform report?" to "what was the true, bottom-line impact of our spend?" By focusing on incrementality, you can make smarter decisions about budget allocation, ensuring every pound spent is genuinely driving growth.

2. ROAS vs. ROI

Your finance team doesn't just see ad spend; they see all costs. Platform ROAS only considers media spend, ignoring other significant marketing expenses like production, agency fees, and tech subscriptions. Your reported metric should be a true Return on Investment (ROI), which factors in all costs associated with your marketing efforts. This transparent approach aligns your reporting with the language of the CFO.

3. Revenue vs. Profit

The most critical alignment is the shift from measuring revenue to measuring profit. A £3 ROAS might look good on paper, but if your cost of goods sold (COGS) is 50%, your true break-even point is a £2 ROAS. Without considering gross margin, your marketing can be a profitable engine for the business. A £3 ROAS might look great on paper, but if your gross margin is only 30%, you're losing money on every sale. Working with finance to establish a goal ROI that accounts for profit is essential for making sound, strategic decisions.

At Linea Analytics, our always-on MMM solution provides the transparency and speed needed to address these discrepancies in real time. Agreeing on a shared definition of ROI between marketing and finance is essential. Without it, platform numbers will only create mistrust between teams.