There’s an old joke about predicting the weather:
Consider that if a meteorologist always predicted that it would never rain, they would be right 86.3% of the time. No forecaster is ever better than just assuming it won’t rain.
While it may be the best approach for weather forecasters, somehow we doubt that your CEO would be happy for you to rely on guesswork and the status quo to make your marketing decisions — not when the company’s results are on the line. And there has never been so much of the stuff. All of the familiar kinds of information — such as quantitative scores in market research, and the many numeric indicators of online advertising and email marketing — have been augmented in recent years by thousands of new data sources, many of which, Twitter included, are free and publicly available. Even the Bank of England is using Google Trends to measure economic optimism.
Data is the key to knowing your customers
What can we, in marketing, do with all the data available? In short: track to the nth degree what customers do, think and say about you and with you, individually and in aggregate, and use that data to improve all your marketing activities, from product design to marcomms.
It seems only a few years ago that personalising mailings or using CRM seemed new and clever — now we can:
- ‘Retarget’ consumers with adverts that follow them around the internet
- Use their individual habits as endorsements
- Send messages to their mobile phones when they pass near a store
- Customise pricing in real-time based on demand and individual purchase habits
There are also emerging techniques for linking digital and physical worlds such as QR codes, location awareness and Amex’s revolutionary Link Like Love tie-up with Facebook.
While not all of the examples we linked to above proved successful (many in fact were controversial) it’s no exaggeration to say that data-savvy companies will increasingly be able to spot and capitalise on opportunities. They will identify new market segments, and develop more targeted products before their less astute competitors — not to mention the massive improvements that accurate, detailed data can make beyond the marketing department, in customer service, supply chain management, and financial planning.
But, frankly, all this data is also making marketing a lot more complicated. The rise of big data poses marketing directors several difficult questions:
- How can you learn new skills, while still doing the day job? If you’re under the age of 25, you’ve probably got some innate familiarity with the kinds of data that mobile devices and social networks make available and what it can do for the business — but frankly, few marketing directors are in that position, as the Telegraph so painfully explains. Data hasn’t been a big part of your skill set. You’re busy enough already — how can you get up to speed with a whole new way of working?
- How well do you work with IT? Many marketing departments already “own” social networking investments — that’s a great start in big data. But do you also own the infrastructure for storing and mining data you collect? Do you have the access to data from other sources across the company? And if not, do you have the clout to get IT on your side?
- Can you differentiate real patterns from false ones? As online, offline and mobile campaigns and the integration of CRM systems generate more and more data, the more likely it is that you’ll find patterns aplenty, but many of them will be unhelpful or actually misleading. The memorably named Texas sharpshooter fallacy explains why we humans are terrible at interpreting data. We also like the Woolworths ley-lines as an example of how you can find whatever you want if you’ve got enough data.
- Where do you draw the line between analysis and prying? The more data you hold on customers, the more ways you use it, and the more suppliers you share it with, the greater the risks of security leaks and of running foul of the law (such as that governing cookies, or even the good ol’ Data Protection Act). Even if you are careful enough to put in the policies and systems to stay legal and protect the data you hold, you might be seen to be intruding. And social media is not only a source of data, but a powerful way for disgruntled customers to spread news of your transgressions. How can you balance the necessary transparency and ethics with effective competition?
Time to bring in some help?
Over time new regulation, tools, policies, best practices and greater understanding will help marketers to resolve many of these thorny problems. Big data offers too many great opportunities to add value to the customer experience and marketing effectiveness for it to remain a niche subject. But you’ll still need expert skills to interpret the data and use it to drive strategies and programmes. And that’s where we get to the final problem. There’s a bit of a shortage of data skills.
Demand for deep analytical positions in a big data world could exceed the supply being produced on current trends by 140,000 to 190,000 positions [and that’s in the US alone]Big data: The next frontier for innovation, competition, and productivity, McKinsey, 2011
And while we wait for new graduates to come on the job market, take a look around: how many of your internal marketing staff can perform a multivariate analysis today?
Even if you’re extremely tech-savvy, love crunching numbers and spend hours and hours reading about what’s new in marketing, you may struggle to keep up with the possibilities of big data. And that’s where an agency can help. Whether you’re a big business looking for advice and creativity in how to use the information you’ve got, or a small business looking for help getting value from the many free data sources and tools available, we can lend a hand.