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Why Marketing Mix Models Shouldn't Be Called 'Black Boxes'

Nov 22, 2024 - forbes.com
The article discusses the concept of "black box" in technology, particularly in marketing mix models (MMMs). It explains that a technology is considered a "black box" when the process between input and output is not understood. However, the author argues that the term is often misused today, especially when referring to all MMMs as "black boxes". The author suggests that the term "black box" is no longer relevant as advancements in research and computational power have made it possible to understand the complex codes between inputs and outputs.

The article also differentiates between what is proprietary and what is misunderstood. The author emphasizes that just because an MMM provider doesn’t share all the details of the technology, it doesn’t mean they don’t understand how it works. The author concludes by stating that what truly matters is the value delivered to the user, not necessarily the understanding of how the models work. The author encourages users to focus on their needs and the results they hope to achieve when choosing an MMM provider.

Key takeaways:

  • The term 'black box' in technology is often misused to refer to all marketing mix models (MMMs), but this is inaccurate as modern technology has advanced to the point where we can understand the processes between inputs and outputs.
  • While the term 'white box' was developed to describe our relationship with more complex models, it didn't catch on. However, the author suggests that many MMMs could be described as 'glass boxes' because we know exactly what the algorithms are doing and why.
  • There is a need to differentiate between what providers don’t understand and what’s simply proprietary. Just because an MMM provider doesn’t issue an all-access pass to explore the technology doesn’t mean they don’t know how it works.
  • What truly matters is the value delivered to the user. It's not necessary for someone selling an MMM to understand how their models work, as long as they know the strengths and limitations of their product and can meet the needs of the user.
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