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The Pros and Cons of In-House Marketing Mix Analysis

by Noah Powers  |  
April 25, 2012
  |  10,394 views

In this article, you'll learn...

  • Four reasons in-house marketing mix analysis is beneficial
  • Five drawbacks to bringing marketing mix analysis in-house
  • Whether or not in-house marketing mix analysis is right for your organization

The question isn't should you be doing marketing mix analysis, but rather, how you can best do it. Marketers across multiple industries are learning what consumer packaged goods manufacturers have known for years: Marketing mix analysis provides insights from market dynamics and past performance that improve return on investment (ROI) and optimize spend.

So what is the debate? It's whether organizations get the best results from outsourcing marketing mix analytics or building in-house capabilities.

Here are some relevant factors:

  • Business scope (breadth of products/geographies and current and future levels of marketing spend)
  • Data availability
  • Current state of marketing mix in your organization
  • Complexity of your specific business market

Though many organizations initially outsource marketing mix analysis to get moving quickly, most will eventually consider bringing the process in-house. Cost is often the preeminent consideration, but it's not the only one.

Let's consider the pros and cons of in-house implementations.


Pros

1. Consistency and Transparency

Vendor models—those used in hosted services—are often closed and proprietary. Your organization has limited to no visibility into weaknesses, failures, and potentially hazardous "workarounds." If you engage multiple suppliers, they'll almost certainly provide inconsistent information for identical marketing decisions across different brands or products. An in-house process, on the other hand, allows you to produce, validate, and manage the predictive marketing response models at the heart of marketing mix analytics.


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Noah Powers is customer intelligence specialist at SAS, which provides analytic solutions to help solve complex marketing issues, including marketing mix optimization and marketing optimization.

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Comments

  • by Theresa Kushner Wed Apr 25, 2012 via web

    Agree with everything Noah said. Except it does seem fairly self-serving since he is a SAS analyst. If you've already invested in analytical capabilities, marketing optimization is the task most analysts want to get the chance to do. Aggressive organizations will build their internal resources toward being able to deliver just this kind of project.

  • by John Dawson Wed Apr 25, 2012 via web

    I'm not sure I do agree that nimbleness is a benefit of using an external consultant. From my time as a Consultant, we'd need to go through RFP's, Procurement and a whole host of things in order to execute a very simple project. Internal teams have permission to just get on with what's important.

    I'd also add that I think context is so important when running analysis that you can't underestimate the value of having someone internal who understands their subject.

    Another point I'd add is this - it's often not possible to specify exactly what the question is that you need someone to answer for you. On many occasions, I started a project thinking the objective was to analyse one metric only for five other questions to come up which we needed to look at as a higher priority.

    For me, quick accurate answers are the key - if you can't get these then that's your issue.

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