The Challenges of Outsourcing Marketing Mix Modeling for Media Agencies

In our previous article, we explored why small and medium-sized media agencies struggle to adopt Marketing Mix Modeling (MMM). High costs, lack of expertise, and opaque processes are common barriers. Here, we uncover the deeper causes and evaluate the implications of outsourcing MMM to external vendors or freelancers.

Outsourcing to Service Vendors

Engaging a service vendor—whether a consulting firm like Analytic Partners or a SaaS platform such as Mass Analytics or Mutinex—might seem logical, but significant drawbacks exist:

• Loss of Control By outsourcing MMM, agencies surrender control over their marketing measurement process and data-driven strategies. Although agencies retain data ownership, they often lack influence over or understanding of the modeling process, limiting their ability to fully utilize insights.
  
• Recurring Costs Vendors charge service fees, whether for consulting or SaaS. While SaaS platforms may seem cost-effective, subscription fees and customization expenses accumulate, burdening smaller agencies.
  
• Inconsistent Outcomes Switching vendors often results in discrepancies due to differing methodologies. This inconsistency can confuse agencies, leading to doubts about the reliability of past and present insights.
  
• Weak Internal Data Strategy Reliance on external providers prevents agencies from developing strong internal data strategies and capabilities, which are essential for modern marketing.

Outsourcing to Freelancers

Freelancers may appear more affordable, but they share many drawbacks of vendors and add new concerns:

• Data Security Risks Sharing sensitive marketing data with freelancers introduces potential risks. Unlike established vendors, freelancers may lack robust security measures, increasing the chance of breaches.
  
• Variable Quality The effectiveness of MMM depends on the freelancer’s skills. Expertise varies widely, and some freelancers may lack the technical know-how to meet an agency’s specific needs.
  
• Operational Vulnerability Relying on a single person for critical insights is risky. If the freelancer becomes unavailable, agencies may face disruptions or lose access to valuable methodologies.

We explored Fiverr, one of the most well-known platforms for freelancers and outsourcing services. When searching for "Marketing Mix Model," we found several freelancers offering their services, with rates ranging from $100 to over $2,000.

Broader Challenges of Outsourcing MMM

Whether agencies outsource to vendors or freelancers, these overarching challenges persist:

• Inconsistent Methodologies Each provider employs different approaches, creating inconsistencies that hinder long-term planning and erode trust in MMM.
  
• Financial Strain Even cost-efficient outsourcing requires recurring expenses, which can stretch limited budgets.
  
• Missed Opportunities for Growth Outsourcing prevents agencies from building internal data management and analytical capabilities, leaving them at a disadvantage in an increasingly data-driven industry.

A Call to Action for Media Agencies

To overcome these challenges, media agencies must shift toward self-reliance:

• Adopt Scalable Tools Scalable, user-friendly MMM tools enable agencies to manage marketing measurement independently and cost-effectively.
  
• Develop Robust Data Strategies Agencies should focus on centralizing data storage, enhancing security, and fostering a data-driven culture. Building strong internal capabilities ensures sustainable growth and competitive advantage.

By addressing these issues, small and medium-sized media agencies can reduce outsourcing dependencies and unlock the full potential of MMM for effective, data-driven marketing strategies.

If you’re facing challenges or need support in building a data-driven strategy and business model, contact us. We are More Than Data, and we’re here to help.