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Market Guide for Marketing Mix Modeling

Published 22 June 2022 - ID G00730567 - 22 min read

By Analyst(s): Matt Wakeman, Jason McNellis


Initiatives: Marketing Data and Analytics; Marketing Operations

Marketing operations leaders use marketing mix modeling to


holistically quantify and improve marketing investments. This
research summarizes changes to the measurement landscape
and five resulting considerations to ensure you select the right
marketing mix modeling provider.

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 (including unified measurement approaches) is more suited for long-term


measurement and planning than multitouch attribution (MTA). MMM’s increasingly
detailed and more frequent analyses bring the method closer to replacing MTA and
unified measurement approaches (UMA). MTA lacks the ability to measure offline
channels or market influences like competitive activity and brand perception.

■ 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.

■ Leading brands recognize MMM as an increasingly important key measurement tool


because of marketers’ need to assess the impact of emerging channels, shifts to the
digital tracking landscape and changing consumer behaviors.

Recommendations
As a marketing operations leader looking to quantify the incremental impact of your
marketing and advertising investments to improve planning, you should:

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■ Focus on measurement objectives, not methodologies. Clearly state insight
objectives and determine the decision frequency for each objective. Then, shortlist
measurement partners based on the answers.

■ Incorporate measurement objectives and dimensions of differentiation (e.g., scope


of measurement services or level of platform automation) to strengthen your request
for proposal (RFP) process for selecting a new strategic marketing measurement
provider.

■ 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):

■ Incorporates and quantifies external impacts — To improve measurement accuracy


and scenario planning flexibility, MMM generally includes business and
socioeconomic factors outside of the CMO’s control. The former can include retail
distribution, staffing plans and stocking levels, while the latter may be consumer
confidence, share of voice and interest rates. Inclusion of these outside factors
improves measurement accuracy and scenario-planning flexibility.

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■ Focuses on estimating incremental marketing impact — MMM measures the
additional impact directly caused by marketing. The most common incremental
metric is increased sales. But market share, new account sign-ups or store traffic are
also modeled to determine how marketing influences those outcomes. A focus on
marketing’s incremental impact is logical, but it remains elusive for many marketing
teams. A recent academic review listed “lack of robust incremental measurement” as
one of biggest factors limiting the effectiveness of digital advertising. 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).

Figure 1: Marketing Mix Modeling Provides Four Unique Capabilities

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Today, marketers are presented with a range of attribution solutions from vendors making
overlapping and competing claims. Distinguishing among methods is further complicated
because many providers offer more than one solution, and solutions are often
customized. Brands investing over $10 million in working media should be familiar with
MMM, especially those with direct access to conversion data (see The B2C CMO’s Guide
to Marketing Attribution, Measurement and Testing).

Comparing MMM and UMA


The distinction between MMM and UMA is shrinking. Data deprecation is making UMA
output less detailed, while modeling advances are enabling finer details in MMM output.
Historically, UMA touted more granular insights and recommendations than MMM. But as
this difference diminishes, the question of “which method?” is less relevant than in
previous versions of this Market Guide. Savvy marketing operations leaders should start
with a realistic understanding of consumer data tracking and a prioritized list of
marketing objectives when approaching the vendors covered in this research.

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.

What About Multitouch Attribution?


MTA refers to software and services that help marketers evaluate how much credit to
assign to each element of a multichannel marketing campaign or each touchpoint leading
to a conversion. Models may use business rules, algorithms and experimental controls to
isolate events on the conversion path and determine their influence on a desired outcome,
such as a sale or registration.

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).

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Figure 2: Multitouch Attribution vs. Marketing Mix Modeling

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:

■ Digital data deprecation — This is likely the largest contributor to increased


adoption. Data deprecation includes Identifier for Advertisers (IDFA), pending
elimination of third-party cookies from Google, email changes from Apple,
strengthening of walled gardens and use of private browsers. Methods that rely on
stitching together digital journeys have more holes. MMM is buffered from data
deprecation because it uses aggregate time series data as an input — for example,
daily display impressions for a given campaign in a given geography.

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■ Platform reporting that eclipses presentations — The days of MMM projects
delivered as large, yearly presentations are dwindling. This market is increasingly
defined by technology platforms. These platforms simplify and accelerate
socializing performance results and self-serve scenario planning. In addition, more
frequent updates (often monthly, occasionally daily) support more rapid test-and-
learn marketing cultures.

■ 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.

■ Providing more frequent updates — Fresher insights enable agile testing.


Monthly results are common, and weekly updates are supported by some
vendors. The days of a yearly presentation delivered in the second quarter of
the following year are over. MMM today is underpinned by technology
platforms that support data ingestion and normalization.

■ Improved positive perceptions of marketing analytics — According to the 2020


Gartner Marketing Data and Analytics Survey, marketers with high trust in MMM are
more likely to report higher performance than those lacking trust (see How Marketing
Operations Leaders Validate Their Marketing Mix Model). In addition, we’ve
concluded that trust in MMM correlates to the overall impact of marketing analytics.
Those surveyed with high trust in MMM have stronger perceptions of the overall
marketing analytics function, including its ability to deliver business value (see
Figure 3).

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Figure 3: Perceived Performance Increases With MMM

Market Analysis
Assess Providers by Five Major Dimensions
Providers in the MMM market differentiate along five major dimensions:

1. Scope of measurement services

2. Service delivery model

3. User interface

4. Level of platform automation

5. Approach to walled gardens

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Scope of Measurement Services
While all of the providers listed in this Market Guide share certain measurement
capabilities (see Figure 1 above), large differences are still present. The importance of
these differences will vary by brand, and reinforces the need for clearly articulated
strategic measurement objectives. Measurement differences include:

■ Methodological focus — Providers typically have unique approaches that separate


short-term and long-term advertising influence, or separate upper- from lower-funnel
effects. Providers vary in their approach to measuring long-term brand impact.
Differences can include brand data used (e.g., syndicated surveys, custom surveys
or digital sentiment) and the mathematical approach to incorporating brand into the
model.

■ Segmentation of results — Some providers can model results across different


customer groups or separate geographies. For example, some can show return on
media spend separately for low- versus high-value customers to further inform
planning. Other providers are experienced in dividing marketing insight by product
category, such as apparel versus home.

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?

■ What capabilities do you offer around segmenting results by customer or product


groups?

■ What additional demands do segmenting results place on the data necessary to


support the model?

■ Do you have a list of the desired input datasets (with levels of aggregation) needed
to meet our measurement goals?

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■ Does your team have experience supporting all of the geographies required for this
project?

■ What datasets will we need to provide directly? What data will you provide or access
directly on our behalf?

■ How often do you update models for your typical engagement?

■ How do you account for various audience targeting datasets, tactics and
methodologies?

Service Delivery Model


Providers differ in the degree to which they emphasize self-service, offer a managed
service or provide an extensive consultative model. MMM models require technical
supervision, particularly for data onboarding, model setup and validation. Even
experienced digital marketing analysts and in-house data scientists could lack experience
around setting model constraints, performing in-depth validation or aligning the
methodology into a larger measurement framework. In addition to technical areas, you
should determine if your marketing team will need support socializing results or
developing data-driven media plans. Full adoption of MMM requires buy-in from multiple
stakeholders, leading some buyers to place just as much weight on consulting support as
technical know-how (see Build Trust in Marketing Mix Modeling Across Your
Organization). Make sure the vendor can deliver all of the support, advising and training
that you need.

Questions to ask:

■ What is your typical service delivery model? Is self-service available?

■ 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)?

■ How is the business impact of the engagement tracked over time?

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User Interface
MMM is increasingly delivered as a platform, not a presentation. While the two are not
mutually exclusive, Gartner predicts that the importance of the platform will continue to
increase. This will heighten buyer consideration of the user interface, especially related to
three functions:

■ 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?

Level of Platform Automation

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Vendors vary in their level of automation, especially in the data ingestion, data preparation
and model-building phases. While data from your martech, adtech and point of sale (POS)
systems can often be provided in a consistent and automated way, data from offline
channels, agency partners or competitive activity is often less consistent. Some vendors
have built automated data platforms to handle the less consistent files, while others rely
on analysts to handle exceptions. Similarly, some vendors have fully automated model
rebuilding, while others use a hands-on approach. Human intervention allows for a high
level of customization, but can become expensive when model updates are frequent or
many models are supported (often for different KPIs and geographies). 2

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?

Approach to Walled Gardens


Many of the vendors in this Market Guide are Amazon, Facebook and/or Google
measurement partners. Marketers report significant interactions in performance across
walled gardens and other media. It’s easy to imagine three different types of cross-
channel interactions:

■ Walled gardens extend reach — boosting audience sizes

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■ Walled gardens’ reach is largely duplicate — leading to waste

■ 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?

■ How do you standardize measurement across walled gardens to accurately inform


overall planning and budgeting?

■ 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).

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Table 1: Representative Vendors in Marketing Mix Modeling
(Enlarged table in Appendix)

Market Recommendations
When evaluating or engaging with MMM initiatives:

■ Differentiate standard and strategy-specific measurement objectives. While


improving media metrics is a common goal, it doesn’t provide clarity for judging
program success. Setting specific targets for metrics like improved efficiency (cost
per conversion) and effectiveness (top-line growth or return on advertising spend) is
more effective. Gains of 20% are regularly reported, with some brands claiming
notably higher results. But, many brands have additional goals. Do you need to
better understand a large seasonal campaign, the benefits of celebrity endorsements
or the impact of merging two brands? Are supply chain or distribution changes
negatively impacting your marketing? What about increased media spend from
competitors? Inflation? 3 Providers vary in their approach to and experience with
addressing these questions, so a little extra preparation upfront can make
shortlisting providers much easier. Many clients report multiyear relationships with
their marketing measurement providers, so balance immediate needs with your
projected needs a few years out when creating and prioritizing your measurement
goals.

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■ Scenario-test multiple engagement models to find a vendor with a pricing model
that supports your measurement aspirations. Transparent pricing is not common in
this market. While it is relatively easy to compare quoted pricing, the process should
also make sure that the pricing model is compatible with your measurement
aspirations one to three years down the road. Price drivers vary based on service
delivery model: Vendors with higher levels of platform automation are better
positioned to double the number of modeled KPIs or double the frequency of model
updates without doubling costs. On the flip side, providers that rely more on services
are in a better position to lower fees as they transition clients from a do-it-for-me to a
do-it-with-me to a do-it-myself engagement model. Use three scenarios — complete,
balanced and minimum measurement levels — to compare pricing across providers.

■ Secure a marketing data resource. Organizations with lower marketing data


maturity should allocate about one full-time equivalent (FTE) to help acquire,
validate and update data for MMM. Building these models is data-intensive. While
MMM “only” requires aggregate data, even a basic model requires data from each
channel that often needs to be sourced from different parts of the organization and
aggregated in new ways. UMA can be considerably more complex because it often
requires user-level data. If you have multiple product-specific or market-specific
models, these numbers will likely increase, especially if data for each product or
market is coming from different sources. More complex MMM deployments and
most UMA deployments include an additional dedicated marketing analytics
manager to support the broad number of analyses possible.

■ Staff up appropriately to ensure adoption. Organizations new to these approaches


should also anticipate the demand for repeated socialization and change
management. You will need resources to win over the marketing team. You will likely
need to:

■ Get media planners and buyers to use MMM as a key input to guide their
process

■ Encourage creative to apply MMM for testing message themes

■ Motivate audience-specific marketing teams to understand and incorporate


halo effects from other media efforts into their planning

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.

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■ Buy before you build. Most organizations buy from external services and platforms
for the bulk of their strategic marketing measurement needs. Gartner clients cite
media strategy experience, analytics expertise and access to benchmarks as reasons
they select service providers. Vendor-prepackaged analytic interfaces and
preconfigured data integrations designed for marketers are additional benefits to
buying over building. Yearly investments generally start in the six figures, but can
reach into the low seven figures for large, complex engagements laden with services.
If you are considering approaching MMM in-house, make a detailed inventory of
your internal analytics resources and experience handling complex media
measurement projects. Unless you’re able to afford, attract and dedicate talent on
par with the best providers and consulting firms, your investments will be better
spent on technology and outside talent.

■ Approach strategic marketing measurement as a journey. Measurement will


continue to change as web browsers, walled gardens and regulators evolve their
policies around customer and prospect data. For a review of likely outcomes and
what they mean to marketers, see 3 Scenarios for Privacy’s Impact on Targeted
Advertising. In addition, as brands mature analytically, they often require different
insights. These two forces encourage changes to your marketing measurement over
time. If you choose to work with an external provider, also commit to revisit annually
your overall marketing measurement framework and goals.

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Acronym Key and Glossary Terms
Marketing Uses statistical analyses to isolate the impact of past marketing
Mix Modeling spend on incremental sales. These models reveal which channels
(MMM) or customer touchpoints have the highest incremental return on
investment. Key inputs include historical sales data and
marketing spend by channel. See CMO’s Guide to Marketing Mix
Modeling.

Multitouch Makes use of advanced algorithmic modeling that tracks


Attribution individuals across multiple channels, registers exposure to
(MTA) marketing messages and links that exposure to a desired
outcome (such as a sale). MTA is used to determine which
marketing activities provide the greatest return on investment to
inform future spend and optimization decisions.

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.

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3
2020 Gartner Marketing Data and Analytics Survey: The purpose of this study was to
better understand the current approaches to marketing analytics that support marketing
strategies to enable future growth and success. The primary research was conducted
online from June through July 2020, among 415 respondents in North America (49%) and
Western Europe (51%). Eighty-three percent of the respondents came from organizations
with $1 billion or more in annual revenue. The respondents came from a variety of
industries (number of respondents in parentheses): financial services (68), high tech (52),
manufacturing (65), consumer products (37), media (60), retail (51), healthcare providers
(30), travel and hospitality (27), and IT business services (25).

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.

Document Revision History


Market Guide for Strategic Marketing Measurement - 12 December 2019

Recommended by the Authors


Some documents may not be available as part of your current Gartner subscription.

Build Trust in Marketing Mix Modeling Across Your Organization

What CMOs Need to Know About Marketing Attribution, Measurement and Testing

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How Marketing Operations Leaders Validate Their Marketing Mix Model
Broaden Your Marketing Measurement Toolkit to Address Both Tactics and Strategy

© 2023 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of
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Table 1: Representative Vendors in Marketing Mix Modeling

Vendor Solution Name

 Analytic Partners GPS Enterprise, ROI Genome

 Data2Decisions PoleStar

 Gain Theory Gain Theory Data One, Gain Theory ROVA, Gain Theory Interactive

 Ipsos Unified Marketing Mix Modeling

 IRI IRI Lift, IRI Marketing Foresight

 Kantar CrossMedia

 Marketing Evolution Marketing Evolution Platform

 Marketscience Marketscience Studio

 Mu Sigma muMix

 Neustar Optimizer

 Nielsen Marketing Mix Modeling

 OptiMine Software OptiMine Insight, OptiMine Intent

 Ovative Group Marketing Analytics Platform (MAP)

 Scanmar MMM2Go, strataQED, portfolioQED, optimiseQED

 Sellforte Marketing Mix Modeling Platform

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Source: Gartner

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