Big data? Big deal. Without the right tools to analyze all that data, big data is worth nothing – in fact it costs to store it all.
But big data does represent a huge opportunity for the marketing function. Its power lies in uncovering patterns across a vast pool of different data types that create a competitive advantage – be that a new market, customer segment or change in customer behavior.
Marketing is no stranger to using analytics, so tackling big data – which is basically no different from plain old data – should not (in theory) pose a problem. It’s simply that the volume, velocity and variety of that data is rapidly expanding, as well as growing in complexity. Social media, mobile devices, in-store and online sources are all churning out data. Sensor data, collected from the fast evolving internet of things market, has the potential to dwarf transactional data over the next few years.
McKinsey estimates that easily 20% of marketing budgets could be re-plumbed elsewhere without any loss of marketing ROI – that equates to about $200bn of global marketing budget – through using big data effectively. In fact, McKinsey suggests that marketing ROI could be boosted by 15-20%, all thanks to better use of big data.
Big data (we’ll persist in calling it ‘big’ for now) adds fresh ingredients to the marketing mix, creating the opportunity to cook up a Masterchef level gourmet delight. It helps companies acquire more customers and keep them and increase their spend, through more personalized campaigns. And that all adds up to increased profitability.
Technology such as cheaper memory, faster CPUs and cloud-based services and better analytics are bringing those benefits into the reach of many more organizations.
The opportunities are colossal and tantalizing, but so are challenges. Big data will make marketers more accountable and more exposed to the rest of the business. A wider source of data also presents possible privacy and ethical issues.
But the there’s a pull from customers as well as an internal push towards big data. Customer expectations are changing. It didn’t used to be feasible for companies to know their customers individually, but now customers are beginning to expect it. Big data opens the door to personalisation on a scale not possible before. The emphasis is shifting: it’s not about the product or service your company produces, it’s all about the customer.
So this involves changing your perspective. Rather than think: ‘what data do we have and what can we do with it?’, turn things on their head to the customer point of view. Ask what or how do your customers hope to use your product and what would be useful to help them achieve that aim? The emphasis shifts from making a sale to making a customer happy. Ultimately, it’s the latter approach that will bring in more profit.
Too do all that effectively, it’s essential that big data goals match business goals. To make that achievable (and measurable) create separate those initiatives, such as improving customer loyalty or conversion rates. Tackle them one at a time so that you can focus on getting the right type of data and that the team are focused on one goal.
To guarantee you can squeeze as much money out of every drop of marketing spend, it’s key to have the right team on board. For, while big data may be a technology issue, it’s also a people issue. The growing reliance on marketing analytics means everyone needs to become an analytics expert and the talent pipeline cannot spew out people quick enough. But technology will hopefully provide an answer: as vendors hide the increasing complexity under the bonnet, lesser skilled individuals will be able to bend and shape the data.
While big data can radically change the way you work, this is not something that is done overnight, in one fell swoop. Small steps and small lessons learned will add up to big gains eventually. But that’s not at the expense of having an overarching, big picture strategy for what you want to achieve with big data. It’s only by having a clear picture of what you want to achieve that you can start to decide what technology will help you achieve those aims.
Above all, data is the key: so take care of your data. There’s a lot of it, so find out where it’s located and who has responsibility for it. Don’t be too bogged down in the ocean of data, concentrate instead on asking the right questions that will throw out truly useful and actionable insights.
While the future of marketing is to become more data-driven, this should not be at the expense of creativity. It’s always going to be great content and great ideas that make the best marketing campaigns: the data is just there to make those campaigns more targeted and measurable.