Market Guide For Mar 730567 NDX 3
Market Guide For Mar 730567 NDX 3
Market Guide For Mar 730567 NDX 3
Overview
Key Findings
■ Marketing mix modeling (MMM) delivers results. Marketers who use the methods
presented in this Market Guide typically cite a hefty improvement in marketing
performance and better financial outcomes than their peers.
■ MMM projects are resource-intensive. It’s common to both dedicate internal staff
and rely on multiyear vendor relationships that cost six figures (U.S. dollar, British
pound or euro) annually.
Recommendations
As a marketing operations leader looking to quantify the incremental impact of your
marketing and advertising investments to improve planning, you should:
■ Set aside sufficient internal resources to support your service provider. Project
success often requires internal support in the areas of data access, data validation,
results socialization and change management.
Market Definition
Marketing mix modeling (MMM) helps marketing leaders plan future marketing spend and
measure the performance of past investments. MMM applies advanced statistical
techniques to estimate the aggregated impact of marketing activities on desired
outcomes, such as sales or lead generation. Given the reduced availability and accuracy
of digital marketing data, similar methods such as unified measurement approaches
(UMA) increasingly rely more on MMM and less on digital behavioral data. Therefore, this
Market Guide uses the term MMM to refer to both methods. The questions addressed by
MMM include larger media spend over longer time frames, but the granularity of insights
and frequency of updates provided by these tools continue to increase. MMM is often
outsourced to specialized vendors that blend software and consulting around data
ingestion, model building, media optimization and media planning.
Market Description
MMM combines four capabilities into a holistic solution not available in other forms of
marketing measurement (see Figure 1):
■ Estimates cross-channel effects — MMM can account for the impacts that channels
have on one another, respecting the fact that channels do not act in isolation. For
example, television placements may have a positive impact on owned and social
media, or direct mail may increase paid search conversions.
■ Includes online and offline conversions — MMM tracks both offline and digital
conversions. This is essential to address many measurement objectives such as the
impact of digital on in-store sales or the impact of linear TV on search. Both
methods work for direct and indirect sales channels (as long as the sales data is
available).
As MMM and UMA capabilities converge, we use the term “MMM” to reference both in this
Market Guide. For those seeking a deeper comparison of the methods, please see
Measure the Impact of Marketing Using These Four Methods.
Although MTA cannot address questions about the longer-term advertising impacts or
shifts in marketing performance due to external factors, it provides marketers with an
important tool to increase performance by adjusting spend level during campaigns (see
Hype Cycle for Digital Marketing, 2021).
MTA was excluded from this guide because it is inherently focused on channel
optimization, rather than the longer time horizons and greater breadth of inputs that
characterize MMM. MTA also focuses on measuring trackable behaviors, which further
limits what can be quantified (see Figure 2).
Stand-alone MTA solutions, however, are a powerful method to consider for short-term
optimization within channels. For more on appropriate and inappropriate use cases of
MTA, see When and How to Use Rule-Based Marketing Attribution Analysis. In addition,
data clean rooms are emerging as a potential alternative to MTA measurement. These
solutions, most notably Google Ads Data Hub and Amazon Marketing Cloud, bring
granular, big data pools of advertising details across display, search and video ads, and
are designed to facilitate data integration, processing and analysis.
Market Direction
Adoption of MMM continues to grow for four reasons:
■ Increased value creation — Model outputs are answering more questions. Therefore,
they are adding more business value through a series of enhancements:
■ Modeling multiple KPIs — Building distinct models for different KPIs allows
marketers to understand how their activities affect different customer
activities. For example, financial services marketers may look at new account
sign-ups and total deposits, or retailers may look at sales separately for new
customers and returning customers in addition to sales overall. A brand that
heavily relies on discounts could track top-line sales and margins separately.
■ Creating more detailed models — Models provide more detail for tactical
support, such as channel activities being divided into campaign type, such as
acquisition, retention and reengagement.
Market Analysis
Assess Providers by Five Major Dimensions
Providers in the MMM market differentiate along five major dimensions:
3. User interface
A deeper understanding of measurement methodology will help you assess if the vendor
is well-positioned to meet your measurement objectives. More detailed measurement
generally requires more detailed and more accurate time series data. The questions below
are valuable for highlighting differences across vendors.
Questions to ask:
■ What are the top three measurement questions you are most often hired to answer?
■ Does your team have experience building models for my particular industry?
■ What are the most common KPIs you model for brands in my industry?
■ Do you have a list of the desired input datasets (with levels of aggregation) needed
to meet our measurement goals?
■ What datasets will we need to provide directly? What data will you provide or access
directly on our behalf?
■ How do you account for various audience targeting datasets, tactics and
methodologies?
Questions to ask:
■ How much of my in-house team’s time will be required to support the effort?
■ What level of support do you include in a typical engagement for each area: model
validation, socialization and change management, training of internal staff, and
media strategy?
■ What service levels are built into the contract, and what would be considered out of
scope?
■ How are results delivered (i.e., presentation, work session, analytics platform or a
combination)?
■ Performance reporting — The ability for campaign and channel owners to look at
performance across different dimensions, including time period, campaign and
geography.
■ Scenario planning — The ability for planners to run their own what-if scenarios, such
as optimization of a given media investment for one or more KPIs. This also
includes templates for common marketing strategies, such as a new product launch
or competitive introduction.
■ Change tracking — Some platforms include a tracking log for tactical changes
based on scenario planning and optimization. These record the investment changes
made to marketing plans and can be used to determine the returns on platform
investment.
Questions to ask:
■ Which user personas (data analyst, media planner, media strategist and/or
marketing executive) does your platform support?
■ What analytic activities can users complete in the platform (compare different media
investment scenarios, perform a diagnostic analysis of marketing results, compare
results to benchmarks, track changes made to media plans, or design and measure
experiments)?
■ How does the scenario planning module allow one to optimize and plan across
multiple outcomes?
■ How is user access managed for your platform? Are multiple permission levels
supported, or do all users have the same privileges?
For less automated platforms, don’t be surprised if pricing doubles when switching from
quarterly to monthly updates. The right update cadence for your brand will vary in part
based on your decision frequency (e.g., how often you consider budget shifts across
channels; see Broaden Your Marketing Measurement Toolkit to Address Both Tactics and
Strategy).
Questions to ask:
■ How automated is your data ingestion process? What data quality checks are in
place and automated?
■ Do you have prebuilt connectors to accelerate data ingestions from the adtech and
martech platforms we are currently using?
■ What does the end-to-end data flow diagram (e.g., inputs, outputs, processing,
storage) look like, and who is responsible for each step of the flow?
■ How long does it take to rebuild a model with updated data? What factors contribute
to the amount of time necessary to rebuild a model?
■ If I increase the frequency of model rebuilds or the number of KPIs predicted, how
will that affect my total costs?
■ Walled gardens increase frequency past a critical threshold — and boost conversions
To discern among these possibilities and facilitate accurate planning, one measurement
solution must incorporate all channels. The approach to walled gardens matters because
it can impact the timeliness and granularity of the insights provided. This is especially
important for marketers who optimize spend on a weekly or more frequent basis.
Questions to ask:
■ What data partnerships do you have in place today with Amazon, Facebook and
Google?
■ Do you access data from Amazon, Facebook and Google directly on my behalf?
■ What level of insight do you provide for each walled garden? For example, can I see
results separately for Instagram and YouTube by daypart and by campaign?
Representative Vendors
The vendors listed in this Market Guide do not imply an exhaustive list. This section is
intended to provide more understanding of the market and its offerings.
Market Introduction
Vendors range from specialist providers to large data and analytic companies or agencies
that offer measurement as a feature to enterprise buyers. Use an RFP process, with
questions matched to your insight objective and decision frequency, when selecting a
provider (see Table 1 and Note 1).
Market Recommendations
When evaluating or engaging with MMM initiatives:
■ Get media planners and buyers to use MMM as a key input to guide their
process
In addition, you may need to educate the broader executive team on the process. These
workflows will likely require another one-half FTE for at least a year or two. To learn more
about these socialization efforts, see Build Trust in Marketing Mix Modeling Across Your
Organization.
Unified Answer questions that span both the tactical and strategic
Measurement impacts of marketing. These approaches attempt to resolve the
Approaches challenges of disparate, unlinked methodologies and insights.
(UMA) UMA is the coming together of top-down MMM and bottom-up
MTA to provide the marketer with a cohesive, connected set of
insights with which to inform tactical optimization and strategic
planning. See Measure the Impact of Marketing Using These Four
Methods.
Evidence
Multiple marketing leaders from global brands and diverse industries were interviewed for
this research. In addition, several vendor experts were consulted regarding specific
research hypotheses.
1
“Inefficiencies in Digital Advertising Markets,” Journal of Marketing 2021, Vol. 85(1) 7-
25.
2
There is an important difference between rebuilding the model and rescoring with an
existing model. In model rebuilding, channel performance will likely change based on new
data as the underlying coefficients get “retuned” to the new data. A “full” model rebuild
may test new data inputs and revisit some of the feature engineering along with details of
the algorithmic approach. In model rescoring, results are simply updated using
coefficients from a previously built model. Model rescoring generally requires less effort
and is easier to automate than model rebuilding.
This year’s survey had a split panel, with 209 producers of marketing analytics and 206
consumers of marketing analytics. Producers of marketing analytics were required to
have high involvement in producing marketing analytics used to inform decisions.
Consumers of marketing analytics had to have a high level of involvement in decisions
informed by marketing analytics.
The survey was developed collaboratively by a team of Gartner analysts and Gartner’s
Research Data, Analytics and Tools team.
Disclaimer: Results do not represent global findings or the market as a whole but are a
simple average of results for the targeted countries, industries and company size
segments covered in the survey.
Note 1
Representative Vendor Selection
The vendors in this Market Guide are a representative, but not exhaustive, compilation.
The 15 vendors listed here are those that appear most frequently in five sources that
Gartner reviewed for this research or were included for showing an innovative approach.
What CMOs Need to Know About Marketing Attribution, Measurement and Testing
© 2023 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of
Gartner, Inc. and its affiliates. This publication may not be reproduced or distributed in any form
without Gartner's prior written permission. It consists of the opinions of Gartner's research
organization, which should not be construed as statements of fact. While the information contained in
this publication has been obtained from sources believed to be reliable, Gartner disclaims all warranties
as to the accuracy, completeness or adequacy of such information. Although Gartner research may
address legal and financial issues, Gartner does not provide legal or investment advice and its research
should not be construed or used as such. Your access and use of this publication are governed by
Gartner’s Usage Policy. Gartner prides itself on its reputation for independence and objectivity. Its
research is produced independently by its research organization without input or influence from any
third party. For further information, see "Guiding Principles on Independence and Objectivity."
Data2Decisions PoleStar
Gain Theory Gain Theory Data One, Gain Theory ROVA, Gain Theory Interactive
Kantar CrossMedia
Neustar Optimizer