An Overview of Meridian: Google’s Latest Open-Source Marketing Mix Model
Google has recently launched an open-source Marketing Mix Model (MMM) called Meridian, which aims to provide marketers with advanced analytics and forecasting tools. This article explores the key features, capabilities, and limitations of Meridian, comparing it to Meta’s MMM called Robyn.
Understanding marketing mix models is crucial for marketers as it allows them to analyze how different marketing strategies influence sales and forecast future results. MMMs break down the drivers of sales into factors such as price, product attributes, distribution, and promotional actions, as well as external issues like the economic state or competitive moves. By analyzing historical data, MMMs assign numerical values to each component of the marketing mix in relation to total sales, enabling marketers to optimize strategies, allocate budgets effectively, and forecast the impact of changes in one element on future sales.
MMM tools employ regression analysis or similar statistical techniques on large quantities of data related to sales and marketing to identify patterns and causality relationships. This data-driven approach enables companies to make informed decisions, optimize resource allocation, and improve brand loyalty through enhanced consumer understanding.
Meridian stands out in the MMM landscape by offering more precise and actionable insights. It emphasizes privacy, advanced measurement, and accessibility for marketers. Some of its key features include calibration with incrementality experiments, incorporation of reach and frequency, specialized guidance on measuring search across all media channels, and transparency that allows users to customize the code and parameters according to their specific requirements. Additionally, Meridian provides actionable data inputs, modeling guidance for optimizing cross-channel budgets, and comprehensive educational resources and support for implementation.
While Meridian seems similar to other MMM tools in terms of privacy, Bayesian methods, and customizable settings, Google’s documentation reveals that Meridian employs a more advanced approach. However, implementing MMMs can be challenging, especially for those without prior experience. Technical and analytical support for modeling work is highly recommended.
Meridian’s capabilities include local-level modeling, which allows marketers to analyze marketing efforts on a local or regional scale using hierarchical geo-level modeling. This approach provides more detailed insights and reliable figures on the effectiveness of marketing strategies, particularly in terms of ROI. Meridian can handle over 50 geographical locations and 2-3 years of weekly data, making it a powerful tool for crunching numbers. It also incorporates past knowledge through Bayesian modeling, enabling marketers to build on their previous insights, experiments, industry know-how, or benchmarks. Furthermore, Meridian helps marketers make wise decisions by analyzing online channels like paid search and suggesting the best way to allocate budgets across different channels or the best total budget to meet goals. It also allows users to explore “what-if” scenarios and provides clear reports on strategy effectiveness.
However, Meridian does have limitations. It lacks upper vs. lower funnel support, making it challenging to analyze these components independently. It also fails to account for fluctuations in performance within the analyzed time frame, which could lead to inaccurate forecasts and analysis, especially with longer timeframes.
Meta’s MMM, Robyn, appears more advanced than Meridian, putting pressure on Google to deliver a competitive tool as the leading global advertising platform. While both tools share many features, Meta has published case studies for Robyn, whereas Google is still in the process of building theirs. Robyn is accessible to all via GitHub, fostering community support. The effectiveness of Meridian and Robyn will be determined as more advertisers use them, revealing their strengths and serving as crucial marketing opportunities for advertising platforms.
In conclusion, Meridian offers innovation, transparency, and practicality in the field of MMMs. It provides marketers with actionable insights and customizable features, allowing them to optimize strategies and allocate budgets effectively. However, it also has limitations that need to be considered. As more advertisers use Meridian and Robyn, their strengths and weaknesses will become clearer, shaping the future of MMM tools in the advertising industry.
