Tuesday, October 09, 2012

Four Opportunities to Leverage Data

Why is the interest in leveraging data rising so quickly?

Marketing is awash with a deluge of dark data and needs to figure out how to utilize it.

Yet data-driven marketing isn't new.   In fact its been around for decades ever since we used shoe boxes of customer records, profiled postal areas with census data or looked at bi-monthy audits of sales data.  But the interest in 'big data' took off in the last twelve months as reflected in search traffic on Google Trends.

"Three technology trends — media fragmentation, addressability, and interactivity — are converging on the world of marketing and advertising. .... analytical strategies grounded in deep audience knowledge will rise to predominance."

That was written in a Forrester report entitled "Left Brain Marketing" back in 2004.  Based on newsletters, conferences and posts it appears that convergence is accelerating.  And that change in pace is likely because digital technology has reached critical mass - not to mention having a simple moniker that sounds cool. "Big Data" has a ring to it and conjures up the kinds of imagery that technology marketers just love to leverage.

From a marketing perspective, digital technology...
  • moves the decision point about what to deliver to late in the planning cycle because things can be assembled based on business rules utilizing a portfolio of assets.  Content can now be seamlessly repurposed to create new packages that are served to consumers.  Social aggregation strategies like Flipboard and Paper.li are new forms in the delivery of personalized content.  For a synopsis of twitter see the "The Brand Strategy". 
  • changes our thinking from Plan - Execute - Track to a world of Execute - Track - Adjust based on refining rules. The emergence of trading desks and real-time-bidding in the digital advertising world exemplify this shift.  An unintended consequence of real time is the increased reliance (not to mention relevancy) of using first-party data as opposed to traditional third-party data which has a natural lag time associated with it. 
  • represents a major environment for the consumption of information.  From smart phones to ipTV the delivery platform is addressable.  Thus, the power of targeting will extend to formerly broadcast or published media.
  • leaves breadcrumbs that need to be handled differently. The volume, velocity and variety of data is so different than traditional marketing data that it requires a regime change in thinking.   Aggregated and anonymous behavior of segments is a better approach than trying to guess at the identity of a consumer.  And the use of personal information in targeting is likely a non-starter for most companies.
What is truly different however is that marketing now owns the processes that spawn 'big data'.  In the past data were borrowed from other areas of the businesses or licensed from suppliers and thus provided a supporting role to 'solving needs profitability.'   The rise of digital marketing changed all that.   We now generate our own data and thus are responsible for figuring what it means and what to do with it.  There is no curtain to hide behind anymore.

So, where are the opportunities?

In a recent white paper Winterberry Group (reg required) explored four avenues.
  • Audience Optimization - identifying who is (could be) interested and reaching out to them appropriately
  • Channel Optimization - leveraging the touch points along the path-to-purchase to reduce friction
  • Advertising Yield Optimization - maximizing value of inventory thru identification and alignment with high-value audiences
  • Targeted Media Buying - purchasing media based on common interests and implicit/explicit behavior 
Since those topics can be viewed as variations on the same theme, the insights need to be drawn from a collective, holistic point of view.

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