“Now more than ever before businesses have tons of data on what customers want,” writes Erik Sherman. “Too bad they don’t have a clue what to do with it.” [“Oops: Big Data Baffles Most Marketers,” Inc., 19 June 2013] Sherman bases his conclusion on results from a survey from the digital marketing software company Lyris that was conducted by the Economist Intelligence Unit. The survey concluded “that 45% of marketing executives are failing to use Big Data to understand consumers. [“The Economist Intelligence Unit (EIU) Reveals Data Challenges Have Created Significant Gaps in Marketers’ Understanding of Consumers,” Lyris, 12 June 2013] Sherman continues:
“According to the survey of 257 marketing executives, 45 percent said that they lacked the capacity to analyze big data, while a full half didn’t have the budget to pay for digital marketing and database management. A lack of competence in analyzing data was cited as a major obstacle to implementing more effective strategies according to 45 percent of the executives. Those who could afford the analysis and had the skills to pull it off, at least in theory, found that, in fact, they didn’t get much bang for the buck. Only 24 percent said that they always used big data for ‘actionable insight.’ And only 27 percent said that ‘they always integrate customer data from different sources into a centralized customer database.’ As Lyris put it, marketing executives often ignore big data because they find it confusing.”
The goal for those involved in big data analytics is to uncover valuable insights and the most important result they can achieve is to make those insights understandable for decision makers. A few months ago I read a headline that declared “Half of all new marketing roles didn’t exist five years ago.” [Marketing, 9 April 2013] It should come as no surprise, therefore, that so many marketing executives find big data analytics confusing. Michele Nemschoff, Vice President of Corporate Marketing at Business Review Australia, insists, “Big data is a new resource that will provide a significant advantage to those marketers who use it.” [“Marketers Should Care About BIG Data,” Marketing 2.0, 16 July 2013] But to use it, they must understand it. Nemschoff believes that too many executives see big data in the same light as traditional data obtained from research and consumer reports; but, she believes big data “will allow marketers to observe trends and make decisions in real-time, much like investors on the stock market do.” In other words, big data should help make things more clear not more confusing. “Because of the confusion and lack of knowledge, Sherman writes, “marketers are missing the boat in some big ways with consumers.” Specifically, he names four ways they are “missing the boat.” The first is that marketers underestimate the importance of email campaigns. He explains:
“About 37 percent of consumers ranked email as a top channel for pre-purchase decisions, while 52 percent said email was most important for post-purchase interactions. However, companies put more of their budgets toward websites, not email.”
Secondly, Sherman believes that mobile and social are overhyped paths to purchase. Respondents to the Lyris/EIU survey “said that the two had the least influence on purchasing.” Sherman continues:
“Executives, on the other hand, ranked social responses as the third most important key performance indicator, following only sales and response rates. Although 62 percent of consumers liked social for product promotions, they like to learn about products via company websites, email, or third-party websites.”
Along those same lines, Sherman believes that personalization is overdone (i.e., there can be too much of a good thing). He writes:
“About 63 percent of consumers find marketing personalization pervasive enough that it has become useless. The surprise and shock factor are gone. A third of consumers said that personalization was one of their top annoyances and 70 percent say that the practice is superficial. And yet, personalization was the number two marketing strategy.”
Personalization only achieves results if it is used at the right time (and, sometimes, in the right place). There is a fine line between getting personal and getting annoying; which is a good segue to Sherman’s final point — marketers don’t get privacy. He explains:
“The use of data collection and analysis bothers consumers and 49 percent say that they’re concerned about threats to their privacy. Marketers, though, think only 23 percent of consumers are concerned.”
The topic of privacy is too complex to be reduced to a couple of percentages. Nevertheless, privacy remains a hot topic whenever the subject of big data is raised. Nemschoff offers three ways that marketers can use big data better. They are: Constructing and evaluating campaigns; analyzing competitor data; and, gaining insights from real-time data. Concerning the construction and evaluation of campaigns, she writes:
“Big data and the systems that hold and analyze it, such as apache hadoop, are able to pick out trends from multiple sources of data, rather than just one or two generated reports. This more extensive data can often pick up on trends and insights that marketers can’t find by completing a consumer survey. Most importantly, big data can be used to answer those key questions a good marketer should be asking, such as, was the blue or orange icon more effective, or what started a certain hashtag trend? With the extra information marketers can construct more targeted messages and quickly evaluate the effectiveness of that message. Marketers will also be better able to predict the effect of an action, such as the effect of decreasing TV advertising on online sales. This process would encourage making more hypotheses and conducting more tests than marketers have typically done in the past. Instead of carrying a campaign through to completion and then evaluating it, marketers can change messages and elements of a campaign as they are being carried out, which in the end will result in a much higher ROI than the current method.”
The ability to generate and test hypotheses (much more quickly and cheaply than in the past) can be a real benefit. Systems that employ cognitive reasoning can auto-generate and test interesting hypotheses as they gain a better of understanding of what is desired. On the subject of analyzing competitor data Nemschoff writes:
“Most marketers have their own data. They know what their consumers think. They’ve surveyed target audiences and tracked who goes to the Facebook page and website. What most marketers haven’t had access too, however, is their competitors’ data. Wouldn’t it be great to know why the competitor’s customers shop there or how effective the competitor’s new campaign is? With big data, marketers will have access to that information. It may not be as specific as gaining access to a consumer report, but it will be easier to check out trends and evaluate competitor performance. Marketers who jump into the world of big data will access to a whole new segment of info that marketers who don’t won’t have.”
Finally, on the subject of gaining insights from real-time data, Nemschoff writes:
“Instead of having to wait for data to accumulate through a survey or Google Analytics, marketers can access all of the data that’s compiled every minute to respond to consumer trends and handle any potential problems. Imagine the difference this could make in a crisis situation, such as a product recall.”
She concludes, “Overall, big data won’t change everything about marketing, and it certainly could be a distraction if it isn’t used strategically. However, marketers who are smart about how they take advantage of it could see a significant increase in useful data that will make creating a successful campaign more predictable.” Although marketers may not understand everything they could about big data, Kevin Glacken reports that they are further along than many of their colleagues. “Many Marketing, Insight, Brand and Product teams,” he writes, “are leading the charge within their organizations to extract true, actionable intelligence from the hype of ‘big data.'” [“Marketers Leading the Charge to Unlock Value from Big Data,” SmartData Collective, 13 July 2013] So maybe we shouldn’t be too hard on marketers — they are trying to understand and use big data wisely.
