The Ultimate Guide to Choosing Your Perfect MMM Tool

Marketing Mix Modeling (MMM) is essential for businesses looking to optimize their marketing strategies. Today, there are numerous MMM tools available, but choosing the right one for your business and calibrating it can be challenging. In this blog post, we compare three leading free MMM tools — Robyn, Meridian, and Orbit — along with the option of paid tools or custom-made solutions, to help you decide which best fits your needs. These guidelines can assist in choosing what might work best for your business, but every situation is unique, and predicting the perfect fit can be difficult. We recommend considering these factors and trying at least two different options before making a final decision.

Robyn

Developed by Meta, Robyn is a powerful and commonly used MMM tool that employs a frequentist method for analysis. Tailored specifically for marketing mix modeling, Robyn ensures that all its features and functionalities are geared towards optimizing marketing efforts. It focuses on stable, long-term data but might be slower to respond to quick changes in the market.

Robyn includes functionalities to account for seasonality, meaning it can estimate the effects while adjusting for seasonal variations. However, it does not consider that the effect of ads might increase with rising demand. Additionally, Robyn does not allow for separate modeling for different geographic locations, which could be a disadvantage if you believe your ads or business performs differently in various areas and you have location-specific data.

One of Robyn’s strengths is its incorporation of adstock effects and diminishing returns, crucial for understanding the long-term impact of marketing activities. It also allows for calibration with geo tests, providing a robust method to validate the model’s accuracy.

Robyn’s extensive documentation makes it user-friendly, especially for those new to MMM. This feature simplifies understanding and implementing the tool effectively, possibly making it the most accessible option for beginners. However, if not calibrated and used correctly, Robyn can produce varying results that might undermine trust in the model. The key is to avoid giving it too much freedom. By carefully calibrating and selecting parameters, you can limit the extent of budget allocation changes, ensuring you don’t receive overly dramatic suggestions that are impractical to implement. Finally, Robyn provides a variety of visualizations and outputs to help you make sense of and utilize the results effectively.

Meridian

Meridian, developed by Google, leverages a Bayesian approach, offering a distinct perspective on marketing mix modeling (MMM). Designed specifically for MMM, Meridian features functionalities tailored to meet marketers’ needs.

Meridian accounts for seasonality but does not consider that the effect of ads might increase with rising demand, which is a significant disadvantage it shares with Robyn. It includes functionalities for adstock effects and diminishing returns, similar to Robyn. Unlike Robyn, Meridian allows for the separation of data into geographic locations, potentially providing valuable insights into regional performance if you have geo-specific data.

A significant advantage of Meridian is its support for calibration with multiple geo tests per channel, using Bayesian MCMC (Markov Chain Monte Carlo) methods. While Meridian outputs a single model, which might limit flexibility, this can also simplify decision-making by providing a clear, singular perspective.

One of Meridian’s strengths is its extensive documentation, which uses causal inference terminology. This can be highly beneficial for users aiming to understand the underlying factors driving their marketing performance. However, without prior knowledge, the documentation can be overwhelming, as it relies heavily on mathematical and statistical concepts.

Overall, Meridian offers robust tools for regional analysis and accurate calibration, making it a strong choice for businesses seeking detailed insights and dynamic adaptability. However, users should be prepared for the complexity of its documentation and ensure they have the necessary background to fully utilize its capabilities.

Orbit

Orbit’s MMM tool, although not specific to marketing, offers robust capabilities for time series forecasting and marketing mix modeling (MMM). Orbit uses Bayesian MCMC methods for MMM, providing a versatile approach to modeling. Unlike Robyn and Meridian, Orbit’s tool is not limited to MMM but can be used for general time series forecasting. It includes functionalities for accounting for seasonality, essential for accurate modeling.

Orbit allows for the separation of data into geographic locations, similar to Meridian, and supports calibration with geo tests using Bayesian MCMC methods. It focuses on accuracy, using SMAPE (Symmetric Mean Absolute Percentage Error) for calibration. Unique to Orbit, this tool allows for time-varying coefficients, letting the effect of marketing activities change over time.

However, a major disadvantage in Orbit, is that it does not include functionalities for adstock effects and diminishing returns, which can be crucial for understanding long-term impacts. Being a general tool, it may require additional customization for marketing-specific insights.
If you have a very seasonal business and believe the impact of your campaign changes over time, Orbit might be a good choice due to its flexibility with time-varying coefficients. However, for businesses needing specific functionalities like adstock effects and diminishing returns, additional customization may be necessary to fully utilize Orbit’s capabilities.

Paid MMM Tools

There are several paid MMM tools available that claim to offer advantages over open-source options. While we won’t mention specific tools, it’s important to note that every tool has its pros and cons. Here are some examples of needs that free tools don’t address but paid ones do:

• Time-Varying Effects and Adstock Effects Together: The main free tools currently don’t offer both time-varying effects and adstock effects with diminishing returns simultaneously. Some paid tools provide these features, which can be crucial for a comprehensive understanding of marketing impact.
• Intermediate Results: Free tools typically do not account for intermediate results, such as brand search effectiveness. Brand search often appears - highly effective because it captures users at the end of the funnel, after they’ve already decided to buy. Some paid tools can separate these effects and provide a more accurate estimate of the true impact, preventing overestimation. Other alternatives include excluding such data or manually limiting its influence.
• Confidence Intervals: Paid tools often provide confidence intervals or other measures of certainty in the results, helping you understand how reliable the findings are.
• User-Friendly Interfaces: Paid tools may offer more user-friendly interfaces, making them easier to use for those without advanced technical expertise.

However, cost is a significant consideration, as paid tools are usually expensive. More importantly, paid tools often operate as a black box, limiting transparency. In our experience, paid tools can be difficult to trust. Customers often report receiving results without understanding the underlying reasons, leaving them unsure whether to rely on the findings.

Custom-Built MMM Solutions

For businesses with unique needs, a custom-built MMM solution can be ideal. These solutions, designed using frequentist or Bayesian methods, are tailored to address the specific dynamics of your business. They integrate seamlessly with your existing data infrastructure, offering advanced features like sophisticated adstock models, diminishing returns, and custom geographic segmentation. This ensures precise alignment with your data and objectives, delivering high accuracy and valuable insights. However, developing and implementing custom models requires significant time and effort, which can be a disadvantage compared to off-the-shelf solutions.

Conclusion

Each of these MMM tools — Robyn, Meridian, Orbit, paid and custom-built solutions — brings unique strengths to the table. While these tools are powerful, the complexity of choosing the right one and implementing it effectively cannot be understated. Navigating the nuances of MMM tools requires deep understanding and careful consideration to ensure your marketing strategy is optimized for success and drives your business to greater heights.