XICA conducts MMM market survey to clarify the actual usage of MMM (Marketing Mix Modeling) in Japan

XICA Corporation (Headquarters: Minato-ku, Tokyo; President and CEO: Hirao Yoshiaki; hereinafter referred to as XICA) conducted an "MMM Market Survey" with the aim of clarifying the actual usage of "MMM (Marketing Mix Modeling)," a method for comprehensively analyzing marketing, in Japan.

The survey results showed that only about 3% of marketers are aware of MMM, but that companies that actively use MMM understand its limitations and are exploring new options beyond MMM. On the other hand, given that about 7% of marketers are not aware of MMM, it can be inferred that the gap in data utilization between advanced marketing companies and those that are not is widening. In measuring the effectiveness of marketing, future challenges appear to be "visualizing the cumulative effect of brands" based on data and "clarifying areas for improvement in each measure."

Background of the investigation

MMM (Marketing Mix Modeling) is one of the marketing analysis methods for implementing data-driven marketing. It comprehensively analyzes not only online and offline marketing measures, but also external factors other than advertising, such as competition and weather, and visualizes the impact of each measure on sales. In the United States, a marketing-advanced country, about 8% of marketers are aware of this method and about half of companies are using it(*1), but as of 2020, the adoption rate of Japanese companies was only about 1%(*2).

Given this background, XICA conducted an "MMM market survey" to understand the latest state of MMM usage in Japan.

Survey results summary

1. Only about 3% of marketers are aware of MMM. Meanwhile, the number of MMM adoptions has increased sharply by about 2021 times in 2.7 and has been on the rise since then.
2. 41.8% of MMM adopters introduced it for the purpose of "developing a marketing strategy." Of the two expectations of MMM, "visualization of direct and indirect effects on final results" and "final result prediction," there are still challenges to be overcome in achieving the "final result prediction" aspect.
3. The things we value most when introducing MMM are "the persuasiveness and ease of use of the analysis results" and "the high analytical skills and marketing knowledge of the provider."
4. The annual cost of MMM is over 2,000 million yen. Price is a barrier to adoption
5. The new challenges ahead of MMM utilization are "visualization of brand cumulative effects" and "clarification of areas for improvement in each measure"

Investigation result

1. Only about 3% of marketers are aware of MMM. Meanwhile, the number of MMM adoptions has increased sharply by about 2021 times in 2.7 and has been on the rise since then.

a. As a pre-survey prior to conducting the main survey, 125 marketing personnel were asked about their awareness and adoption of MMM. It was found that only 30.4% responded that they had "adopted/knew/were interested in" MMM.

b. Next, when we asked those who have introduced MMM in this survey when they introduced MMM, the number of adopters in 2020 was 6.1%, while in 2021 it was 16.3%, about 2.7 times higher, suggesting that the number of MMM adoptions increased sharply in 2021. It is speculated that one of the reasons for the increase is that the number of people who introduce or consider MMM as an alternative to third-party cookies has increased due to the announcement by Google and Apple in 2020 of the abolition of third-party cookies and the promulgation of the revised Personal Information Protection Act in Japan in March 2022. The number of MMM adoptions is expected to increase after 3, and although the MMM market itself is expanding, when we look at the awareness and adoption status together, it is clear that it has not yet fully penetrated the marketing industry as a whole.

2. 41.8% of MMM adopters introduced it for the purpose of "developing a marketing strategy." Of the two expectations of MMM, "visualization of direct and indirect effects on final results" and "final result prediction," there are still challenges to be overcome in achieving the "final result prediction" aspect.

a. We asked people who have experience using MMM about the purpose of using MMM. The top answer was "to use in formulating marketing strategies (1%)," followed by "to accumulate data (41.8%)," suggesting that MMM is being used as a platform for data utilization. Meanwhile, use of MMM for reporting and decision-making remained at less than 2%.

b. We asked those who have implemented MMM, as well as those who are interested in it, what they expected from MMM before implementing it. The top three were "It allows analysis that takes into account direct effects and ripple effects (indirect effects) that directly lead to final results (KGI) (3%)," "It allows prediction of future final results (KGI) based on data (25.6%)," and "It allows visualization of marketing effects on final results (KGI) such as sales and sales figures, rather than intermediate results (KPI) such as awareness and number of named searches (21.9%)." It is expected that analysis that takes into account not only the direct effects of measures but also ripple effects (indirect effects) will enable accurate prediction of final results.

c. Furthermore, we asked those who have implemented MMM what they were able to achieve by implementing MMM (*3). Compared to the "What I expected from MMM" above, "I can perform analysis that takes into account direct effects and ripple effects (indirect effects) that directly lead to final results (KGI) (24.1%)" appears to have been achieved to a certain extent. On the other hand, "I can predict future final results (KGI) based on data (19.0%)" and "I can visualize the marketing effect on final results (KGI) such as sales and sales volume, rather than intermediate results (KPI) such as awareness and number of named searches (17.7%)" were somewhat lower than expected.

3. The things we value most when introducing MMM are "the persuasiveness and ease of use of the analysis results" and "the high analytical skills and marketing knowledge of the provider."

a. When those who have implemented MMM and those who are interested in it were asked about the points they place importance on when implementing MMM(*4), the top two were "the convincing analysis results and ease of use in practice (2%)" and "the high level of skill and wealth of marketing knowledge of the provider (16.9%)." This shows that there is a demand for highly accurate analysis and easy-to-understand, convincing analysis that is in line with the reality of marketing activities.

4. The annual cost of MMM is over 2,000 million yen. Price is a barrier to adoption

a. When we asked people who have experience with MMM how much they spend on it per year, the most common answer was "over 2,000 million yen."

b. When those who have implemented MMM and are interested in it were asked about their anxieties and concerns when implementing it, the top answer was "price (cost-effectiveness) (1%)," revealing that price is the biggest obstacle when implementing it. In second place was "content of the report (ease of understanding and completeness of suggestions and proposals) (39.8%)," and in third place was "convincingness of the analysis results and ease of use in practice (2%)," revealing that people are also anxious and concerned about whether they will be able to understand the analysis results and put them to use in measures.

5. The new challenges ahead of MMM utilization are "visualization of brand cumulative effects" and "clarification of areas for improvement in each measure"

a. When we asked people who have implemented MMM to what extent they have been able to utilize the results of MMM analysis in their marketing, 67.3% answered "We have been able to utilize it, but there are still challenges (31.6%)" or "We have been able to utilize it to some extent, but there are many challenges (35.7%)."

b. Furthermore, when digging deeper into the issues felt by those currently using MMM, the most common answer was "New issues that cannot be analyzed by MMM are emerging (16.9%)."

c. When respondents who answered "new issues that cannot be analyzed with MMM are emerging" were asked about issues that MMM cannot solve, the top two answers were "We can optimize budget allocation, but we don't know how to improve the measures themselves (20.0%)" and "We don't know the brand cumulative effect that leads to the final result (KGI) over several years to a dozen years after advertising (20.0%)." It is thought that new marketing issues lie in the phase of applying the analysis results to concrete measures and in visualizing the brand cumulative effect.

(*1) Announcement of the publication of the latest report by the consortium of Nielsen Media, Facebook and Google, "How to Improve Advertising Performance with Marketing Mix Modeling" (Nielsen Media Japan LLC press release)https://prtimes.jp/main/html/rd/p/000000004.000070691.html
(*2) 212 edition of a survey of 2020 corporate advertising managers on how to measure advertising effectiveness (XICA Co., Ltd. press release)https://www.atpress.ne.jp/news/213842
(*3) The numbers for 2a and 2c are different because those who answered "none of these apply" to question 2a were excluded.
(*4) The numbers for 2b and 2a are different because they include people who answered "none of these apply" to question 3a.

Survey outline

・Survey organization: XICA Co., Ltd.
Survey organization: Intage Inc.
・Research method: Internet research
Survey area: Japan
・Survey period: May 2024th to 5th, 24
Survey participants: Employees with a section manager or higher position working for a company with an annual turnover of 100 billion yen or more
・Number of responses: 409

About us

XICA is a professional data science company that supports data-driven decision-making. We provide services to "target and maximize" sustainable growth by using data science to solve our clients' business problems. With high-precision "data science" supported by leading data scientists and researchers from Japan and overseas as our core weapon, we connect business and marketing results through the high "application skills" of our experienced personnel in various fields such as "strategic consulting," "execution support," and "technology implementation."

Representative: Yoshiaki Hirao, President and CEO
Location: Roppongi T-Cube 3F, 1-1-14 Roppongi, Minato-ku, Tokyo
Established: 2012
URL:　https://xica.net/
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*XICA and the XICA name and logo are registered trademarks or trademarks of XICA Co., Ltd. in Japan and other countries.
*Other company names and product names mentioned are trademarks or registered trademarks of each company.

[Contact for inquiries regarding this press release]

XICA Corporation Public Relations Officer: Kawabata
TEL：070-1049-6954
E-MAIL:pr@xica.net