Custom vs. Automated Analytics - Clarification

My last post on Media Mix Optimization (MMO) had a reader at Decision Support Analytics indicate that there are two questions or considerations always brought up by potential clients:

1. will the solution be "off-the-shelf" or custom ?
2. will the models be developed in house or by a vendor?

As I pointed out, there is no single answer to these questions, but I feel that the issue merits another post for clarification.

As a guideline, the "off-the-shelf" solutions are best if your expecting to refresh the media mix models often, this affords some savings but you'll always have to account for some level of customization, after all the models still require a good level of customization in order to work. I do not know of a package that can be classified as "off-the-shelf" and can decompose the media contributions and so I use the term here to designate approaches that have been templatized and that rely on standard processes that can be ported across industries.

And this brings us to the second question: in house or outsourcing. The answer is simple, unless you manage over $50 million dollars of advertising budget it is better to hire external vendors. Establish an on-going relationship with a vendor as a way to acquire instant and proven expertise in an area that is so difficult to hire for.

n fact, the first question is answered by the second: it matters less if the solution is off the shelf or custom, what matters more is if you implement the models in house or outsource them. I'd strongly suggest outsourcing given the difficulty in hiring the right skill set to develop the models, the cost and time lag involved, as well as the risk of having a small team churn.