Google has revealed Meridian, an open-source marketing mix modeling (MMM) tool aimed at addressing key measurement issues. MMM tools are used to assess the effect of marketing and media expenses on critical performance indicators like sales or revenue. They also forecast the potential revenue of marketing activities.
According to a survey by Forrester, about 30% of B2C marketers use MMM tools to comprehend how marketing adds value to the company. Google’s entry into open-source MMM tools mirrors its understanding that limited access to crucial data points within exclusive ecosystems hampers the ability to effectively measure digital ads. Meridian’s mission is to enable teams to construct top-notch MMM models and stimulate improved business results.
Google highlights Meridian’s privacy-sustainable approach, which emphasizes innovation, transparency, actionability, and education. Some concerns are raised considering that the input for MMM does not include individual customer behavior data, making the term privacy-durable seem redundant.
Additionally, while open-source allows users to view and modify the MMM algorithm, complete transparency is elusive, especially for non-tech stakeholders like a VP of marketing.
Questioning the claim on innovation as well, the majority of marketing analytics providers use the same methods as Meridian. The open-source tool uses robust yet common techniques like the geolevel Bayesian hierarchical model factoring in seasonality, frequency, and reach data. The ambiguity also persists over the inclusion of non-marketing indicators.
Concerns are raised over the tool’s potential limits to marketing use cases. Meridian’s scenario planning aligns with offerings by MMM providers, aiding marketers in predicting future marketing impacts. However, it’s unclear if Meridian offers scenario planning that encompasses non-financial KPIs, constraint functionalities, frequent optimizations, or multiple optimization objectives.
Lastly, Merdian’s education leans more towards technical benefits while lacking practical education and support for marketing executives. As per the Forrester Wave report on marketing measurement and optimization, most clients prioritize insights/supporting services.
On a broader note, Google’s announcement underscores the significance of ML-driven marketing analytics for measuring the incremental effectiveness of marketing and guiding budget allocations. It also stresses the importance of adopting a layered measurement approach, considering diverse analytics capabilities from vendors, managing expectations with MMM analysis, promoting incrementality testing, and educating organizations on marketing analytics.
Source: Google Announces Meridian, A Marketing Mix Modeling Tool.
