An evolving dream and nightmare by Loida Rosario
www.intothecore.com @LRosari
“Big Data” is the catch phrase that has bubbled up from the high performance computing niche of the IT market. “In its simplest terms, the phrase refers to the tools, processes and procedures allowing an organization to create, manipulate, and manage very large data sets and storage facilities”, said ZDNet in 2010. For a marketer, big data is both a dream and a nightmare. See eMarketer article.
A dream almost comes true
If done right, big data initiatives have the potential to unleash enormous amounts of information on existing and new clients from disparate internal databases and the gathering of Internet digital data. For marketers, it could give a wealth of data analysis that could better investment decisions for programs, new features/products and overall marketing strategies. A McKenzie study, “Big data: The next frontier for innovation, competition, and productivity”, shows that the economic value that big data can produce has not even started. For example, it estimates that in the Healthcare industry, it could create $300B in new economic value of efficiencies and/or new services. And for retailers, it could generate 60% increase in profit margins. These are big numbers, even if there were off by several degrees.
The rapid pace of digital data growth and huge sheer size only adds to existing data banks. For example, the same study signals that there will be over 40% growth in digital data produced in the next five years. Just think how much digital data a single person produces:
Search: What a person searches, where, when, how often
- Deeper Web Analytics: Once at a site, what he/she does or does not do by click, by page, by link
- Social Media: What places/pages are visited, commented on, shared, liked, etc and the tone of each comment or post
- Advertising/Promotion: What ads are viewed, interacted or consumed in any way, etc.
Multiply that by the millions of current users and then try to break it down by demographics, region of the world, brand category and media channel. This does not even include the many sensors, GPS and other systems that are spitting out data at faster rates that can be properly captured. Ideal for those marketers like me that love data if turned into meaningful information.
A nightmare, potential for death by data
Studies show that to extract all this data, the right type of skilled technical professionals are needed. There’s no secret that today, especially in the U.S., there’s a shortfall of highly skilled technology and math professionals. Closing the gap is going to take some time. Likewise, for those who have ever asked the IT department for information not already provided in existing reports, we know that it is not as easy as it sounds since there are many technical and compatibility limitations.
Let’s assume that these problems are slowly improving. With the emergence of more software-based decision-making and better cross-platform analytical tools by creative start-ups and the established IBMs of the world, these two main operational issues could somehow be alleviated. There are, however, other strategic problems that are harder to address:
Right information: What type of information is really needed?
- Right information: What type of information is really needed? Do the numbers point to the right interpretation? Do we have 1.5M marketing professionals who know the right questions to ask that McKinsey points out as needed?
- Accurate comparison: How can data be segmented by target market so that it really sheds light on consumer behavior patterns that are not averaged but that detail the authenticity of both differences and similarities by segment?
- Holistic evaluation: How is marketing decision-making impacted if disparate bases for data analysis are used without a common denominator or base?
- Global impact: If each country continues to determine what data is available to marketers, can true comparisons on a global basis be made?
- Organizational structure: Who is deciding what data should be captured, kept, analyzed and used? IT or marketing? Together?
- Measuring ROI: How is ROI or ROMI defined, measured and tracked back to big data?
- Rear mirror versus the future: Predictive modeling based on big data is hot. Would it be enough to accurately capture what is next in the consumer’s mind?
Not simple answers
I am convinced big data will ultimately provide beneficial economic value, inspire innovation, and in the process find the true winners of the digital revolution. However, corporations should be taking the time now to plan how to understand, test and implement big data investment and the revolutionary impact in marketing today. There are no simple solutions. I have developed the following suggestions on how to get started:
- Assign time/resources to understand big data issues across functional area, e.g.: Marketing, Strategic Planning and Information Technology
- Agree on a common set of definitions
- Start with the consumer/client in mind. Establish a baseline of what information is available today by target segment of both existing and potential new customers (business or consumers)
- Divide by the key processes of the buying behavior process and the minimum set of information that must be captured at each stage. (There are many models to be explored by industry or preference; the following only captures high level stages that are common to most decision-making models)
- Information gathering/Need awareness
- Set of feasible alternatives/evaluation
- Actual behavior/purchase and ensuing loyalty/engagement
5. Take a breather. See what you do not know and what would make sense to pursue as a first project under a ‘big data’ initiative. Test, refine, learn, and expand assessing progress thoroughout. Make sure the information obtained is meaningful.
6. Use information in real-decision making on a clearly defined project investment. Evaluate ensuing measurements that should be a complement to the information that led to the baseline analysis and original recommendation.
7. Start now.
Disciplined marketing thought and ‘gut’ feel with logical strategic alignment is the type of marketing wisdom needed to really take advantage of big data’s evolution and potential. Are you ready?
by Loida Rosario @LRosari
June 3, 2013: Big Data, no longer a trend, but a major shift in the way to conduct business, is now the subject of much study and investment. See summary of MIT Sloan Panel on the topic.
Quoted:
McKinsey.com Insights Research 20112
http://www.forbes.com/sites/siliconangle/2012/02/17/big-data-is-big-market-big-business/
www4.gsb.columbia.edu/…/2012-BRITE-NYAMA-Marketing–ROI-S…Marketing ROI in the Era of Big Data:
http://www.nytimes.com/2012/02/12/sunday-review/big-datas-impact-in-the-world.html?pagewanted=all The Age of Big Data
