AI-Enhanced Marketing Mix Modeling: Integrating ML, XAI, and LLMs for Greater Accuracy, Interpretability, and Actionability
This paper proposes an AI-enhanced Marketing Mix Modeling (MMM) framework that integrates machine learning (ML), explainable AI (XAI), and large language models (LLMs) to evaluate marketing effectiveness with improved predictive accuracy, interpretability, and practical applicability. Moving beyond traditional MMM approaches, the framework employs the XGBoost algorithm to capture nonlinear relationships between multichannel marketing investments and business outcomes. SHAP analysis further enhances model interpretability through feature-importance rankings, beeswarm visualizations, and dependence plots that quantify each channel’s marginal contribution. In […]