Marketers Mining for Big Data Gold
August 06, 2013
In a post entitled Big Data: Do Marketers Get It?, I discussed the fact that marketers are still wrestling with how best to use big data. Nevertheless, I noted that they are often ahead of their peers in exploiting opportunities offered by big data analytics. Still, many analysts believe that big data’s potential remains mostly an untapped vein of gold waiting to be mined. For example, Jessica Marie writes, “In a world littered with seemingly endless streams of data, marketing has some interesting challenges. What exactly are we supposed to do with terabytes, even petabytes, of data? Unfortunately, there is still a lot of buzz in the phrase, ‘big data’.; Most believe it’s still just a marketing term that provides little value in the long run.” [“Big Data: The Marketer’s (potential) Goldmine,” infochimps, 23 May 2013] Another example comes from the editorial staff at Marketing magazine; it writes, “As rhetoric flies around the topic of ‘big data’ – that concept that everyone’s talking about but nobody seems to know how to define – a business optimisation expert has told Marketing that marketers should focus less on worrying about how to collect data and more on effectively using the data they already have to boost business outcomes.” [“Marketers ‘sitting on a gold mine of data’,” 15 February 2013]
Kevin Geraghty, Vice President of reporting and analytics at 360i, explains, “Big Data is a whole new ball game.” It takes time to learn a new game let alone perfect it. [“Why Big Data Is a New Ball Game,” Direct Marketing News, 1 February 2013] Geraghty asserts, “It’s still not clear as to what the next step is for marketers — despite the fact that we’re now aware of the power that lies in Big Data.” He notes, “It is understandable for marketers to feel a little underwhelmed by the Big Data revolution. Most of the conversation about Big Data focuses on how big it is and tends to be a little light on what to do with it.” Being overwhelmed with data and underwhelmed with results is not an enviable position. Lars Petersen, head of business optimization services at Sitecore, told the Marketing magazine staff, “Marketers are actually sitting on a gold mine of data. Most organizations already have a lot of data that they can use.” The question is, “Use for what?” Geraghty offers some suggestions.
“Finding the right mix of contributing factors for success is a challenge marketers are familiar with. Marketers need to give the right amount of credit to each marketing tactic that customers are exposed to on their journey to conversion. This is often referred to as attribution. Marketers are now learning to leverage Big Data to overcome this challenge. Big Data can track explicit exposure paths and make correlations that were not previously available. This can cut out the clutter and allow marketers to focus on the specific tactics that drive real value for their brands. Another important solution area is one-to-one marketing. Traditional marketing methods focus on customer characteristics, such as age or gender, to craft a message.
Using this approach George W. Bush and Mick Jagger may be treated as similar prospects. Big Data often tells us about customer behavior instead of customer characteristics. And customer behavior is what we care about. In many cases we were using aggregate characteristics as a proxy for expected behavior. Big data helps marketers tell the difference between George W. and Mick.”
The effort to learn the big data game has paid off for marketers who have made the effort. Andrew Frank, a research Vice President at Gartner, reports that an IBM survey “compared the activities of top performing marketers with others.” The survey offered “some evidence that greater involvement with data-oriented activities was correlated with marketing success.” [“Big Data Creates Big Differences in Digital Marketing Efforts,” Gartner, 28 May 2013] Frank reports, “The activities that showed the greatest gaps in involvement between top performers and others happened to be extremely data-driven.” Jessica Marie agrees, “Big data is quite powerful.” At least, it’s powerful if you know how to use it. She states, “While its relevance may seem obvious for certain industries that are heavily structured around data, for most organizations, big data still represents an unknown.” She goes on to offer “a few areas where big data can help marketers gain a competitive edge.” They include:
“Predictions: Big data is fundamentally about predicting outcomes and behavior. By analyzing data from multiple channels and multiple points in time, big data can potentially supply marketers with information about customers’ buying and behavior patterns. We now have highly advanced real-time analytical models to ease these challenges. Instead of taking data from only the past, we can now use big data to find patterns based on real-time data, not simply averages over certain periods of time.”
It’s not just predictions that make big data analytics powerful. Discovering new relationships and identifying subtle patterns are also important benefits.
“Better Decisions: When we have accurate predictive models in place, we can make better decisions about all aspects of a marketing campaign. And more importantly, these decisions can now be based on evidence, rather than guesswork. How many times have you seen marketing and sales teams make decisions based on gut feelings? Gut instinct is a nice way of saying gambling. As creative marketers, we certainly like intuition and creativity, but, for the most part, decisions in this context need to be based on evidence. If we can know what, how, why and when, there is no need to rack our brains on ‘what if’ scenarios.”
Good analytics provide actionable insights; but, it’s not just the insights that are important. Insights must be presented in a timely enough manner that actions can be taken within the appropriate decision cycle. On the other hand, I wouldn’t be so quick to dismiss “what if” exercises. The past is not always prelude to the future.
“Social Media: When social media began to surface, it made us realize that companies can interact and engage with customers (and potential customers) immediately. And with further development of analytics, it’s becoming more important to evaluate those interactions to determine customer opinions and perceptions, and identify ways to improve. Social media has given the public a platform to voice their opinions, which can go viral in the blink of an eye. Depending on what has been said, there may be a need for serious damage control. Never before has the public had the power to make or break a company with an expression of their thoughts and experience. Big data can help gather the information and make predictions based on that data. Just as governments, NGOs and other organizations have used data to predict patterns in crime, health epidemics, and even financial events and fraud patterns, companies can utilize the huge amounts of data in social platforms to not only observe customer thoughts, but to analyze their online behavior to predict the success of a company’s product or service.”
Listening (i.e., monitoring social media comments) has become an important activity for large companies. The point of listening, however, is to respond quickly when problems emerge.
“Customer Experience Management: Consumer data is extremely valuable. It’s the marketer’s currency. And with recent advancements in technology, there are now ways that data can help us discern what is valuable to the customer, what influences customer loyalty and what makes them return. This is relevant because having this insight can help marketers tailor advertising campaigns to current and perspective customers.”
To learn more about the importance of customer experience, read my post entitled Analytics 2.0: Big Data, Big Testing, and Big Experiences — Part 2.
“Automation: Marketing automation is now expanding into more advanced functionality, partially with the help of machine learning. Big data is giving marketers the ability to create advertising and content that is highly personalized. When actions are automated, machines and humans can form a partnership and the platforms can eventually decide what is released to the customer, why it’s released, and how. This can be very powerful because the more relevant the material for consumers, the more likely they are to make a purchase.”
Machine learning will play an increasingly important business role in the years ahead. Google believes it is so important that it teamed with NASA to establish the Quantum Artificial Intelligence Lab to advance research in machine learning. To learn more, read my post entitled Has the Age of Quantum Computing Finally Arrived?
“Marketing Evaluation and Performance: One of the most valuable aspects to big data is that the technology can be used to measure nearly everything. It not only gives marketers insight into their customers, but also into their own organization’s efficiency. Big data makes it possible for marketers to monitor the productivity of marketing programs through constant analysis and evaluation. Campaigns are virtually useless if their performance isn’t being measured.”
Most analysts accept the adage, “That which is measured, improves.” If true, big data analytics should result in big improvements. Marie’s bottom line is this: “Big data is often a missed revenue opportunity. If marketing teams can incorporate data management into their strategy, the payoff is potentially huge. Think of data as the essential ingredient to an overall strategy. The combination of insights from big data, decisions based on those insights, and the actions taken will ultimately prove worthwhile.” I couldn’t agree more.