Why Big Data Marketing Analytics is Helping to Build New Empires
Data is the new oil. In the past centuries, empires were built on this immensely, untapped valuable asset. Today, data is the fuel of the digital economy and empires are being built by those who extract and use it on their behalf. The 5 most valuable listed companies — Alphabet, Amazon, Apple, Facebook and Microsoft — share the fact of taking advantage on this.
A commonality in these empires is the use of Big Data Marketing Analytics. Remember when Amazon magically recommended you a product in which you had interest? This recommendation system is fuelled by Big Data, as you can learn on:
As a Marketer, you don’t need to become a Data Scientist! Though, you must understand the implications of Big Data in Marketing, which according to the pioneer article Marketing Analytics for Data-Rich Environments, enables:
1.Optimising your marketing-mix spending
2.Developing your customer-offer personalisation
3.Using analytics in the context of customer privacy and data security
In practical terms, there are an array of methods to implement Big Data Marketing Analytics which lead to higher return on investment (ROI). Those methods being:
The arrow shows the growing breadth of diagnostic insights as a function of utilization of (mainly structured) internal data and (mostly unstructured) external data.
Simply put, structured data refers to well-organized information that can be stored in a relational database such as the contact book on your mobile phone whereas unstructured data is stored in a more ambiguous format, like data from your social media or mobile apps.
How can you take advantage of Big Data Marketing Analytics?
- Optimising your marketing-mix spending
Marketers today are overwhelmed by the array of different options they have at their disposal and how those efforts impact each other. However, the availability of customer-level data across different devices and media channels enables the understanding of marketing tactics at a granular level never seen before.
For instance, how does online merge with offline? The study Television Advertising and Online Shopping explored how TV advertising influenced online shopping enabling the understanding of how different types of ad content elicits online behaviour.
2. Developing your customer-offer personalisation
From mass till individual-level personalisation, marketers are able to optimize their strategies. For example, a company can develop a global (mass) brand, customize product and brand communication to segments of customers and even personalize experiences at an individual level.
Netflix or Spotify display great examples of recommendation systems empowered by personalisation tools. Based on a customer’s past preferences and using those of similar customers, these companies suggest new playlists personalized to each user. Cross and up-sell strategies can also be enhanced by applying this tools, as the aforementioned example of Amazon, that uses data to learn and maximize profits by showcasing similar books that users with a look-alike behavior also purchased.
Personalization consists of three steps: (1) learning consumer preferences, (2) adapting the offer and (3) evaluating the effectiveness of the personalisation. These steps can also define closed-loop marketing (CLM) which gives rise to adaptive personalization, a process that can be (almost) automated in digital environments. For example, advertising platforms such as Google AdWords or Facebook have been improving their algorithms, allowing you to pick a desired goal and their systems continuously adapt to the end goal selected, though it is and it will always be in the hands of the marketer to decide which strategies to use.
3.Using analytics in the context of customer privacy and data security
With all the customer data gathered comes a major concern about its security and customers’ privacy. Did you know that 67% would stop using a company if their personal or financial information were stolen from it? Get an overview of data security and customer privacy with the following infographic:
Companies can collect data from multiple sources to obtain a better consumer profile. However, only a few update their security processes and policies, leading to a higher chance of breaches, exposing customers’ private information. Moreover, even empires like Uber are vulnerable to this attacks, as seen by the scandal where they paid off hackers to hide a 57 million user data breach.
Expected solutions to counter this can include Governments being more strict about their citizens’ information protection, creating new privacy laws limiting how customer data is used and companies proactively protecting and police their customer information since it benefits both parties. Customers have their information protected and the company forms a relationship of trust with its customers.
With other recent examples like this, the enforcement of the General Data Protection Regulation (GDPR) from 25 May 2018 will reshape how organizations approach data security and customer privacy. Since fines can go up to 20 Million euros or 4% of the global turnover, whichever is higher, marketers must know how this new law will affect their job. For consumers, this adds an extra layer of trust that their information is better protected.
From organisations to empires with Big Data Marketing Analytics
Organizations focused on Big Data and Analytics hold a long-term competitive advantage. Leaders are now required to implement a data-driven culture, where managers ensure the providence of a governance structure capable of integrating data into the organization’s overall processes and strategy. A hybrid power centralization model should be implemented, securing the empowerment of individual departments, but enhancing the sharing of information through a nuclear aggregation across the organization.
In the future, there will be an increasing number of opportunities for people with data capabilities on their skill set. Professionals with a broad and deeper knowledge of statistics, computer science and analytics will be extremely valuable, and marketers must keep the pace by educating themselves in data-related subjects.
For organizations that want to build empires, they must take advantage of Big Data Marketing Analytics, by developing an infrastructure that enables their employees to learn data skills and find the suitable processes to enhance its power.
Do you want to build an empire?
This article was written by André Morais, Francisco Sá Marques and Ricardo Martinho Lopes, students at NOVA Information Management School for “Web Marketing and Electronic Commerce” with the supervision of the professor Diego Costa Pinto, PhD.
