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In statistical validation of Marketing Mix Models (MMM), one of the most frequently discussed metrics is R-squared (R²). It is often used as one metric to assess the statistical quality of a model, but its interpretation can be misleading if not fully understood. In this article, we’ll break down what R2 represents, its limitations, and how marketers should use it in their decision-making process.

In statistical validation of Marketing Mix Models (MMM), one of the most frequently discussed metrics is R-squared (R²). It is often used as one metric to assess the statistical quality of a model, but its interpretation can be misleading if not fully understood. In this article, we’ll break down what R2 represents, its limitations, and how marketers should use it in their decision-making process.