In-House Constraints for Small and Medium-Sized Media Agencies in Adopting MMM

In a previous article, "Why Small and Medium-Sized Media Agencies Haven’t Used MMM", we discussed the key barriers that prevent smaller agencies from adopting Marketing Mix Modeling (MMM). In this article, we aim to dive deeper into the underlying internal constraints these agencies face when attempting to build their own in-house analytics capabilities.

While MMM has proven to be a valuable tool for optimizing marketing effectiveness, implementing it requires a level of organizational support, resources, and expertise that smaller agencies often struggle to achieve. By examining the advantages that large, enterprise-level media agencies possess, we can better understand the specific challenges smaller agencies encounter and why bridging this gap is crucial for their long-term success.

The Analytics Advantage of Large Media Agencies

Large media agencies like WPP, Omnicom, Interpublic, and Publicis have built their dominance partly by establishing robust in-house analytics capabilities. These global giants not only provide traditional marketing and media services but also operate specialized analytics arms designed to meet the increasing demand for data-driven solutions.

These internal analytics teams handle a wide array of tasks, including marketing and media effectiveness measurement, reporting, dashboard creation, audience targeting and retargeting, customer segmentation, and much more. Notably, these analytics operations are often housed within subsidiaries that serve as dedicated partners to the parent company. For instance:

• WPP operates Acceleration and Choreograph as its analytics arms.
  
• Omnicom relies on Annalect for its data-driven solutions.
  
• Interpublic utilizes Kinesso, .which brings Matterkind and Reprise together as a newly unified entity.
  
• Publicis has invested in Sapient as its analytics powerhouse.

These specialized divisions hire highly skilled data professionals and invest heavily in cutting-edge analytics tools and software. They function as internal service providers for their parent companies, delivering analytics solutions to enhance marketing strategy and decision-making. For example, Omnicom’s Annalect supports other agencies within the group, such as OMD and PHD, ensuring that even the client-facing teams have access to high-quality data insights.

Why Smaller Agencies Struggle to Compete

In stark contrast to these enterprise-level operations, small and medium-sized media agencies face significant hurdles when trying to build their own analytics capabilities.

Smaller agencies typically operate with far fewer resources. In markets like Sydney and Melbourne, these agencies often employ only 20–30 professionals, with annual revenues rarely exceeding $10 million. A realistic estimate would be closer to $7–8 million. With such tight margins, these agencies must carefully allocate their budgets to maintain profitability. Unfortunately, this often leads to data analytics roles being deprioritized.

Instead, smaller agencies focus on hiring client-facing professionals, such as account executives, account managers, media buyers, media planners and strategists. These roles directly contribute to revenue generation by managing client relationships and expanding the agency’s business. By contrast, analytics professionals are often viewed as cost centers—essentially an expense rather than a profit-driving asset.

The Value of Analytics: Lessons from the Largest Agencies

The marginalization of analytics professionals in smaller agencies does not mean that analytics itself is unimportant. On the contrary, the largest agencies globally—WPP, Omnicom, Interpublic, and Publicis—have demonstrated the immense value of investing in analytics capabilities. Their continued investment in analytics underscores the importance of marketing measurement in driving effectiveness, enhancing service offerings, and staying competitive.

However, smaller agencies often find themselves falling behind for several reasons:

• Talent Acquisition Challenges Analytics professionals are more likely to pursue opportunities at larger, well-known agencies that offer a clear pathway for career development and access to advanced resources. Smaller agencies struggle to attract such talent due to their limited reputations and lack of infrastructure.
  
• Budgetary Limitations Hiring a skilled marketing analytics professional can cost over $100,000 per year. For smaller agencies, this is a significant investment—one that is often deemed unsustainable. Even when budgets are available, these agencies tend to prioritize roles that directly contribute to revenue generation.
  
• Cultural Misalignment Smaller agencies are predominantly focused on client relationships and business development, which can make analytics professionals feel undervalued. Their technical expertise is often overlooked, and their contributions may not be fully understood or appreciated. This disconnect leads to frustration and disengagement.
  
• Limited Career Development Opportunities Smaller agencies rarely have structured pathways for skill development, performance evaluation, or career progression for analytics professionals. Without guidance, recognition, or opportunities for advancement, these professionals often feel stagnant, leading to high turnover rates. On average, analytics professionals stay at smaller agencies for less than eight months—a concerning trend highlighted by feedback from More Than Data team members who have worked in similar environments.

The Growing Divide: AI and Digital Transformation

The challenges for smaller agencies are further compounded by the rapid rise of AI and digital technologies. Larger agencies are accelerating their adoption of these innovations, leveraging AI to enhance efficiency and improve their service offerings. In contrast, smaller agencies face growing difficulties in keeping up, particularly in the post-COVID era, where many struggle with client retention and shrinking revenues.

To illustrate this gap, consider the analogy of a cyclist attempting to compete with a car. The cyclist, representing smaller agencies, may work tirelessly to keep up, but the car—symbolizing larger agencies—can effortlessly accelerate with the press of a pedal, leaving the cyclist far behind.

How More Than Data Can Help

At More Than Data, we understand the unique struggles faced by smaller media agencies. Our mission is to bridge the gap by providing tailored analytics solutions that empower these agencies to compete effectively in an increasingly data-driven industry.

Through our technology, software, and expertise, we enable smaller agencies to embrace marketing analytics without the need for extensive in-house resources. By partnering with us, smaller agencies can unlock the benefits of data-driven insights, enhance their service offerings, and stay competitive in an ever-evolving landscape.