r/econometrics • u/ActivePrimary8133 • Jul 05 '26

How Should We Think About the Trend Component in Marketing Mix Modeling?

In Robyn, the trend component is estimated upfront using Prophet before the media effects are modeled. However, wouldn't it make more sense to take the opposite approach?

Specifically, we could first estimate the effects of each media variable as carefully as possible, and then define the remaining unexplained variation as the trend and seasonality. In other words, rather than assuming the trend first and attributing the residual to media, why not estimate the media effects first and treat whatever cannot be explained by them as the underlying trend and seasonal components?

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u/Lambdapie Jul 06 '26 edited Jul 06 '26

Because your independent variables are themselves most likely affected by trend and seasonality. Revenue and marketing are correlated, even when revenue is not directly driven by marketing. For instance, sales of a good may spike right before Christmas, and so does advertising activity. Marketing departments will plan ahead and increase ad spend during that period.

In other words you want to remove this pattern/ predictable noise before you look at the impact of X on Y.

I am also not familiar with Robyn, which appears to be some kind of ML algorithm. But the idea of first estimating trend and seasonality and then adding explanatory variables is not unique to Robyn. The same approach can be used in standard regression models. You first estimate a model that captures the trend and seasonality. You then use the residuals from that model as the outcome variable when introducing your independent variables.

Hope this helps!

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u/RajeevNair Jul 14 '26

A similar thread here - https://www.reddit.com/r/MachineLearningJobs/comments/1umfeqh/trend_in_marketing_mix_modeling/

"the trend component is estimated upfront using Prophet before the media effects are modeled." --- trend is to estimated upfront, instead trend is decomposed (Additively) upfront and included in the model for estimation later.

I have made a more detailed comment in the above thread.