Many companies consider building an in-house Marketing Mix Modeling (MMM) solution. And many entrepreneurs consider starting an MMM startup.
A key consideration is: How much does it cost to develop such a solution? Let's investigate this question by looking at how much it cost to develop Sellforte's MMM platform.
How Much Does It Cost to Develop a State-of-the-Art Marketing Mix Modeling Platform?
We have invested $8,500,000 in developing Sellforte's media measurement platform so far. This includes R&D only, and excludes for example customer acquisition costs or financing costs that are enablers for the R&D investments.
I would argue that R&D costs would be much higher in an average case. We have been fortunate in many ways, that has made our development efficient:
- We've had focus: Our platform has been developed with customers from the start
- We had a good starting point: Our early team had experience on key areas, including data science, MMM, promo analysis, software development
- We've had access to the right talent: Our HQ is next to Finland's top university, and we've been recruiting the best talents from Math, Physics, and Computer science programs
In addition, salary costs for developers are much higher in many markets, for example the US.
But Isn't MMM Free Nowadays with Open-Source Libraries?
Some might ask: Can't you get MMM for free with open-source libraries, like Meridian? Did you just waste $8,500,000?
Those people don't understand that
- Modeling is just a small part of the overall solution.
- Modeling library does not guarantee measurement you can trust.
A production-grade system for measuring the incremental sales impact of media is so much more. You need to develop data connectors, data schemas, data processing, model calibration practices, user interface, system architecture, data security, and so on. You need to test it relentlessly, iterate fast, and work through the edge cases.
For a full comparison between Sellforte and an open-source MMM library, check our blog: Meridian vs. Sellforte MMM SaaS: The Complete Comparison.
What Do You get with $8,500,000 invested in Developing an MMM solution?
All of the hard work we have put into developing Sellforte's MMM platform has contributed to a product that
- Is fast to implement
- Measures media ROI reliably, both for digital & offline media, and in all sales channels (Physical retail, eCommerce, Amazon..)
- Enables you to optimize media spend on an overall budget level, and very granularly on campaign level
- Passes IT security audits of even the most demanding retailers
And still, it feels like we are just getting started. Stay tuned for some product news over the next weeks 😉
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