Media Mix Modeling (MMM): Build or Buy?

In the wide world of marketing analytics tools, Media Mix Modeling (MMM) stands out as particularly powerful. While multi-touch attribution (MTA) tools can go deep on the effect of individual touchpoints, MMM gives you thorough information about the performance of individual channels. 

MMM goes beyond the day-to-day to give you a top-down look at performance so you can forecast, budget, and plan accordingly. 

Read more: Why You Should Care About MTA, MMM, and Incrementality.

With more and more companies transitioning to MMM insights, the question arises: should you build a solution in house, or buy one off the shelf? 

The Case for Building

Here are the three primary reasons you may want to build an MMM solution in-house:

1. Customization
2. Control
3. Cost

Customization

The main benefit of building an MMM solution yourself is that you can decide exactly what it does and how it does it. You have full control over the scope and specs of this tool, and you can change that scope whenever you need to as your needs change. 

Of course, this requires resources, but some companies may find that those additional resources are worth it in order to prioritize their own product needs over the potential needs of other customers with an off-the-shelf solution. 

Existing solutions may not always align perfectly with your needs. If that’s the case, building an MMM solution may be right for you. 

Control

In a similar vein, building your own solution gives you complete control — not only over the scope of the product, but also over your company’s (or customers’) data. 

If you’re in a heavily-regulated industry like healthcare or financial services, you may have more peace-of-mind knowing that you can control your security protocols from start to finish. 

Building an in-house solution offers you complete control over proprietary or sensitive information, so you don’t have to worry about potential security issues down the line. 

Cost

Building an MMM tool is more expensive up front (more on that below), but if you expect your data needs to stay the same over the years, you may very well unlock cost savings in the long-term. 

Once your MMM solution is developed, the cost of maintaining and updating it is significantly lower, and it may prove to be more affordable than an enterprise-grade solution. 

This is especially true for large enterprises that deal with massive amounts of data and have the deep in-house expertise to manage a tool like MMM themselves! 

The Case for Buying

There are four main reasons that you may consider buying an MMM solution off the shelf:

1. Convenience
2. Expertise
3. Scalability
4. Resources

Convenience

Let’s be real, it’s way more convenient to buy a ready-made solution than to build one in-house. Instead of kicking off an expensive, long-term process that involves project management and maintenance, you can do your research, take a few demos, make a decision, and be up and running in a matter of weeks — not months or years. 

Buying a solution allows you to skip the planning, development, and testing time and get straight to the actionable insights. 

This convenience is hard to beat, especially for rapidly-growing teams that need to focus all their attention on the task at hand: building their business. 

Expertise

If you don’t have the in-house expertise to build an MMM product and/or interpret its outputs, buying a solution may be the best option for you. Most MMM solutions come with not just the product itself but a dedicated team to help you get started and answer any questions you have along the way. 

Consider how long it would take (and how much it would cost) to hire or train the expertise needed to build, maintain, and make the most of an MMM product. 

With a team like Northbeam, you get tailored recommendations, strategic insights, industry best practices, and more included in the cost of doing business. 

Scalability

As your business grows, so will your data and analytics needs. The MMM model that worked for you last year may not work for you this year, or next. There is serious maintenance to in-house MMM, and that maintenance will involve necessary updates and upgrades to keep up with your growing business needs — and the changing marketing landscape. 

What if privacy measures restrict your existing sources of data? What if new platforms arise that you need to incorporate? 

Off-the-shelf solutions are built to scale with you, and come with a dedicated team that can continue to tailor the MMM product as needed. If you foresee your business growing and changing in the coming years, a ready-made solution may make more sense for you. 

Resources

We’ve touched on resources already throughout this guide, but let’s break it down further. 

Here are some questions to ask yourself to assess whether your team is adequately staffed to build an MMM tool in-house:

• When do you want to be up-and-running with an MMM solution? 
• How many people (engineers, project managers, marketing experts, data analysts, etc.) would you need to dedicate to this project in the building stage?
• How many people (and how much of their time) would you need to dedicate to the maintenance of this product? 

Consider doing some back-of-the-napkin math to put together a simple formula:

Cost of Building an MMM Tool In-House = Resources x Months x Salary Per Month

Here’s a simplified example:

Cost of Building an MMM Tool In-House = 1 Engineer and 1 Marketing Data Analyst x 6 Months x $12,500/month = $150,000

The above would be the initial cost to build an MMM tool — not the total cost. It doesn’t account for regular maintenance and updates. You may want to develop your own formula that takes into account the resources you would need to support this product. 

Depending on your team and needs, it's likely that an off-the-shelf solution will prove more resource-effective. 

Every Company is Different

Every company and use case is different. Depending on your particular situation, building an MMM tool may make the most sense. If that’s not the case, or if you want to talk it out with a professional, our team is here to help. Schedule a time to discover our MMM+ tool and how it can help scale your business to the next level.

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