Why are we afraid of Big Data?
“Data driven digital marketing” is undoubtedly the current trend du jour in the advertising world, and clients in New Zealand are clambering to get on board, but what does it really mean? Below Alex Radford unpacks big data
The need for data led insights stems from the reality that there is no longer a “target market” but “target markets” - in some cases, up to thirty or forty different audience segments (age, sex, location, education, income, marital status, and more), each targeted using different messages, and different channels (paid, owned and earned), but ultimately selling the same product. Yes, it’s often complex, but you need to get it right. And, to do this you need data points.
Personally, I prefer the term “discovery driven marketing”. Semantics, the cynical among you might say, but data in itself is quite uninteresting: just siloed records of purchases, browser behaviour, and personal information.
But what you discover when you analyse this data is really what will drive your future marketing strategies; fuse weather patterns and store footfall to provide insight into what environmental factors influence purchase behavior; discover the relationship between Facebook and paid search, or billboards and social media; discover who actually purchases your products and what factors drove those purchases. Discovery leads to knowledge and, as we know, knowledge leads to power.
To put this all into context, permit me to rewind the clock twenty years; I recall back at school in the UK, we had the privilege of spending a week working with the top Tesco executives. These executives spoke of their passion for data, and how they were able to leverage their loyalty programs to segment their audiences to drive insight into buyer patterns – in the first instance helping them to give their customers more relevant mailers. And I’ve watched over the years as Tesco, using this data, came to dominate the supermarket category and then was able to diversify into finance, insurance, electronics, apparel, and more, because they truly understood their audiences and what drove them.
Today, we can discover the same insights, segment data and develop look-a-like audiences for a fraction of the cost, and a fraction of the time that it took Tesco to evolve and develop these strategies, thanks mostly to cheap cloud storage and off-the-shelf systems such as Google Analytics that allow us to collect and leverage data in ways that up until now only multi-nationals could afford to do.
This isn’t just a case of “because we can”, but because the smart use of data in the future will be the only way companies will be able to stay relevant. In the fragmented, converged world we live in, it’s only by leveraging the information our consumers happily (for now) pass on to us, can we begin to understand how our customers and potential customers alike interact with our brands, our stores, and our call centers.
Just twenty years ago, an average consumer could choose between a handful of TV channels and radio stations, a national and a regional newspaper, and a few magazines. There was no Internet shopping, there was no Google, Pandora, Lightbox, Facebook, or Snapchat.
Consumers today have hundreds of ways to learn and research your brand. And not surprisingly, the path to purchase has become more complicated, more fragmented and just plain difficult to keep track of. As such the consumers themselves are more fragmented, less attentive, and more confused!
The biggest barrier to making sense of the data your organisation has, is ironically often your organisation itself. When developing a data strategy for clients, it not unusual to find that all the data that needs to be analysed sits in different systems: CRM on one system, eDM databases on another, sales data on yet another, and web data elsewhere. In this instance, the first thing that needs to be done is select a data management platform that plugs into all these disparate data sets and over time allows you to pull insights to drive marketing and media decisions, as well as actionable audience segments to talk to across email, web, mail, and the like.
Choosing a data management platform is a big decision. If you are unsure, seek advice from specialists who will assess your data requirements and suggest the right management platform.
Then, in real-time, you will be able to add to the data-sets, share your data with partners, add in third party data to a point where you will truly be able to say that every communication you make is targeted, or decision you make is backed up by statistics.
(This article first appeared in the National Business Review)