6 Best Practices for Evaluating Top Marketing Mix Modeling Companies

By Nikhil Goel, VP, Analytic Consulting, Ipsos MMA

Evaluating marketing mix modeling (MMM) capabilities and finding the top marketing mix modeling solution provider is an important decision that could drive tens to hundreds of millions of incremental revenue and margin gains. The right partner is not just a service provider but a consultative asset and strategic ally in the growth of your marketing ROI (MROI) and your overall business.

When implemented according to best practices, the impact of an MMM program extends well beyond measuring and optimizing marketing.  It becomes a competitive advantage, enterprise business driver and commercial optimization capability that engages and aligns marketing, operations, finance, and members of the cross-functional executive team.  With the right strategic investment partner, you can ensure in a trusted and ‘validatable’ manner that you are maximizing your budget to achieve the highest possible return on your marketing investment while optimizing your competitive position in the marketplace.

With the marketplace growing with Open Source MMM providers, this checklist will help you narrow your search and ultimately select the best out of the potential marketing mix modeling companies.

What to Look for in Marketing Mix Modeling Companies

1. Industry Experience

Ensuring that the MMM provider has experience in your industry sector is critical. MMM has evolved beyond just being a data and analytics exercise; it now serves as an investment optimization initiative to create actionable plans that drive identifiable, incremental value that can be measured in incremental sales, profits and brand equity.

Building a data and measurement strategy that incorporates all business drivers, such as macroeconomic trends, consumer trends, and competitive dynamics, are all important components that will play a role in producing the most accurate reads and predictive models. This understanding allows the measurement provider to talk the clients’ language, earn their trust, validate the results in a way that make sense enabling them to strategically partner with the client to implement change management, ensuring the recommendations are relevant and integrated into business processes.

Specific Questions to Ask the MMM Provider:

• Can you provide examples of past projects within our industry?
• Can you share case studies or references from similar businesses?
• What specific challenges have you addressed in our industry?
• Can you share an assessment of  your understanding of the market landscape and recent developments?
• How do you tailor your modeling approach to fit the nuances of our industry?
• Can you explain your methodology for attributing sales and marketing performance in our industry?
• Who on your team has direct experience with our industry, and what are their backgrounds?

2. Statistical Methodology

Flexible Approaches to Align with Unique Business Dynamics and Data: Marketing mix modeling companies should have deep knowledge of multiple analytic techniques, data transformations, and modeling frameworks to address your brand’s unique dynamics and how they may vary across countries.

Tailored Analytic Approaches: Your provider should be willing and able to tailor the analytic approach to your organization’s specific business questions and objectives, identifying those needs early and up-front while continuing that process in an on-going manner. One-size-fits-all approaches lack the versatility and specificity to achieve maximum value. Things also change requiring clients and their partners to evolve to address those changes. The best practice is to have validated analytic frameworks and data standards by industry, and a flexible, agile approach for implementing and managing them. As part of approach customization, look for the vendor’s ability to address specific and granular questions based on your (not “their”) taxonomy and measure less common business performance objectives.

Marketing Budget Optimization Techniques: Inquire whether dynamic budget optimization is part of the marketing mix modeling company’s methodology. Is flexibility available for budget optimization for global objectives and country- and lifecycle-specific objectives (such as maximizing awareness or consideration)?  Does the potential partner have a budget optimization platform as an online self-serve tool? Do you need consultative support for what-if scenario building and optimizations? If so, does the potential partner offer a consultative team that can iterate over various possible plans to achieve your performance objectives in a highly agile manner that creates understanding, buy-in, usage, and adoption?

Full Funnel Holistic Analysis: The ability to collect and model data that captures “Path to Purchase” is a must-have. Not only should the models include marketing and media variables, but also data collected to represent pricing, operational factors (distribution, inventory, staffing, fulfillment, amongst many other industry-specific factors), external influencers (macroeconomics, competitor actions, weather, industry trends), brand health (awareness, consideration, loyalty), and trade (promotions, pricing discounts). Failure to capture and include this data in the measurement framework ultimately results in “omitted variable bias”, which can deeply compromise the results.

Transparency: Your potential partner should be transparent about its methodologies and how it manages data transformations inside the model. Black box modeling techniques always limit organizational acceptance of the framework, compromising adherence to recommendations and limiting the value provided. Full transparency around the details of data and modeling treatments should be non-negotiable.

3. Data Expertise

 Data Understanding: The most crucial factor in the success of MMM is the MMM company’s capability to determine what data and level of data granularity should go into the model to derive the right actionable business insights. Does the company use multiple levels of data – such as national, regional, hyper-local, and customer segment-specific in the models?  Also, remember that there are many ways to transform data to best represent effects, such as decay rates, “pantry-loading,” and message saturation. The ideal methodologies will depend on your industry and sometimes the specific dynamics of your potential consumer base – ensure your potential partner can design custom treatments to measure these most effectively.

First-party data handling: In a world of reduced signals due to cookie deprecation and the impact of global privacy regulatory trends, the ability to ingest and manage robust feeds to your first-party data systems is even more critical. Ensure your partner has the custom data pipeline expertise to work with your internal tech stacks and teams.

Data Partnerships and Integrations: Marketing mix modeling companies should have robust partnerships with syndicated data providers specific to your industry. These partnerships can help facilitate the inclusion of third-party data capturing viewership, brand metrics, competitive intelligence, and other signals that may extend beyond what your organization is currently capturing and managing. Additionally, various integrations with ad-tech and mar-tech platforms will bring speed and increased data quality to the measurement environment.

Data Collection and Automated Data Processing: Manual data collection and processing can be highly time-consuming and lead to measurement results that are too latent to bring optimal value to the business. Establish your potential partner to seamlessly integrate external data sources for data collection and ingest various types of data, including sales data, marketing spend data, and external factors like economic indicators and competitive actions at scale. Check for capability around setting up data pipelines for automated data processing.

Integration with Central Data Hub: More and more businesses now have a central data hub where all marketing data is available. When evaluating providers, assess the company’s capability to integrate and ingest data directly from your centralized data hub. Integration and ingesting data directly from your centralized data hub can reduce the time to measure results and value by almost 30%.

Data Quality Validation: Potential partners should have automated processes to clean and validate the data and have automated data quality dashboards to highlight anomalies and outliers in data.

Data Compliance and Security: Verify that the vendor has robust data security measures to protect your sensitive information. Ensure it complies with relevant data privacy and regulatory frameworks such as GDPR and CCPA.

4. Benchmark Data

Benchmarks and norms are essential for various reasons. They help with automated data quality checks, improve model specification, and provide context for insights and performance within the industry. A thorough benchmark catalog can significantly enhance your measurement program’s capabilities, making it faster and more effective. Marketing mix modeling companies need access to relevant benchmarks specific to their industry, brand, media partner, and advertising strategy. Moreover, they should have various benchmarks across multiple countries, customer segments, product lifecycles, and channels.

5. Performance Dashboards and Business Planning Tools

For measurement results to be effectively used by business leaders, it’s important to ensure that your provider offers an online platform for on-demand analysis. This platform should use the measurement results to create more effective marketing plans. The tools provided should cover short-term impacts on financial performance and longer-term upper funnel metrics such as awareness and consideration. Additionally, the platform should allow you to view the effect of marketing investments on margin/profit in the form of ROI and LTV, MROI saturation curves, granular media partner and campaign level performance, halo and synergy effects, and budget simulation and optimization scenario plans.

Specific Questions to Ask:

• Can the dashboards integrate with our existing data sources and marketing platforms?
• What predictive analytics and scenario planning features are available?
• How are KPIs and performance metrics defined and tracked? Can we create custom KPIs?
• What collaboration and sharing features are included?
• How do you ensure the security and privacy of our data within the dashboards?
• What training and support resources do you offer for users of your tools?
• How scalable are your dashboards and tools as our data and business grow?

6. Institutionalizing Measurement Results and Value Creation

Educating C-Suite: The marketing mix modeling companies you evaluate should have strong consulting experience in delivering, educating, and institutionalizing measurement results and data-driven marketing process adoption for C-suite executives. Linking model insights to actionable business outcomes enables your executives to fully realize the measurement program’s potential value.

For example, the vendor should educate them on how to quantify the long-term impact of marketing on brand health and consideration and whether additional investment in performance would result in profitable sales growth.  The potential value of these programs is realized when the organization, particularly the C-suite, understands the models, believes in the models, and champions the use of the recommendations.

Connecting Across and Up-and-Down: A good partner will collaborate to connect marketing and finance, media planners and their agencies, and other involved internal/external partners, helping establish trusted means of developing measurable, actionable KPIs and metrics that can drive stronger sales and brand equity. The solution should connect teams up and down an organization and across it.

MMM Deliverables: Assess the depth and breadth of deliverables—insights, media deep dives, quantitative and qualitative recommendations, and media mix optimization. Program insights should be actionable, clearly highlighting the impact of different marketing activities and recommending strategy changes where warranted. The insights should help inform decisions such as staying invested in brand budgets or increasing performance media for growth.

Speed: Can the vendor deliver not only historical insights but support the planning, measurement, re-evaluation and re-calibration working with your marketing/media and agency teams?  Do the delivery capabilities meet the speed requirements and needs of your business?

Training: Does the vendor provide training to understand deliverables to the larger marketing optimization and insights team? Specifically, does the vendor offer a flexible training program that provides training on diverse topics such as data treatments, model interpretation, model validation, optimization, and insights and how to use them for decision-making?

Continuous Validation and Recalibration: Models are never static, as they must mirror the current business strategy and marketplace dynamics. Providers must have a constant process for validating and recalibrating these models and the forward-looking scenarios they produce transparently. This ensures continuous buy-in, recency, and relevance of the MMM capability.

Selecting the Right Marketing Mix Modeling Company

Selecting the right partner for marketing measurement is critical for businesses seeking to quantify the financial value of marketing, optimize the efficiency and effectiveness of their marketing strategies, build a stronger brand, and maximize sales through data-driven decision-making. As illustrated through this checklist, the process involves a thoughtful evaluation of potential partners based on various factors, including industry experience, methodology, data expertise, integration capabilities, value creation, and proven success.

Companies need specialized expertise and insights into the marketing mix modeling, providing a framework for actionable business outcomes and sustained growth. By focusing on these key aspects—ranging from technology assets and methodological robustness to transparency, trust, and tailored solutions—business leaders can find a marketing measurement partner that understands their unique industry challenges and can propel their organization toward profitable growth.