Are practices in marketing measurement and ROI changing? How about the integration of digital and traditional marketing?
Has the excitement around big data brought about a shift in how marketers conduct their business?
These are some of the topics for investigation in a recent study conducted by Columbia Business School’s Center on Global Brand Leadership and the New York American Marketing Association (NYAMA).
The short answer: there is still a big gap between where organizations would like to be and where they actually are in capturing, analyzing, and using data to inform business decisions.
Data is either not collected, collected too infrequently, not shared across the organization, not linked at individual customer level, or when it is collected, it is often not appropriate to real-time decision making and not used to personalize communications.
Marketers appetite for new technologies is stronger than their ability to implement them effectively.
When reviewing social media use, the authors list many of the known and popular tactical approaches: email marketing, digital content, social network outposts, and mobile ads. Consistent outcome-based measurement across media is as elusive as program integration.
Extracting value from data requires discipline
This is consistent with research conducted by Eric Brynjolfsson, an economist at the Sloan School of Management at the Massachusetts Institute of Technology in June 2011.
In a global survey of 586 senior executives, sponsored by SAS and conducted by The Economist Intelligence Unit, they looked at the state of big data, along with the organizational characteristics of companies that are adept at extracting value from data.
Companies that use “data-directed decision-making” (defined “not only by collecting data, but also by how it is used—or not—in making crucial decisions”) enjoy a 5-6% boost in productivity.
Some key findings:
- There is a strong link between effective data management strategy and financial performance. These businesses understand the potential of big data and are already leveraging their data to their competitive advantage, applying them to strategy development, product direction, market development and operational efficiency.
- Extracting value from big data remains elusive for many organizations. Organizations are still learning how to manage big data.
- Many companies struggle with the most basic aspects of data management, such as cleaning, verifying or reconciling data across the organization. Many struggle to deliver important data to the right people within an acceptable time frame. And there is also a dearth of work force skills required to sift through, analyze and develop insights from big data.
- Companies that are furthest along the data management competency continuum—strategic data managers—provide a useful model for how organizations will need to evolve if they are to extract and utilize valuable data-driven insights. Strategic data managers use data to first identify specific measurements and data points that align closely with corporate strategic goals.
The amount of data produced continues to accelerate, even as businesses large and small struggle to update their practices. There is still much to learn.
For those companies that combine a long view with advanced data management practices and cultural change, there is an opportunity to put some distance between them and their competition.
Examples of companies that mine social media data
One of the benefits of investing resources to use social technologies is the type of data points an organization can collect in real time.
Two examples of large companies that are mining social media data [hat tip digiday]:
- Procter & Gamble gained an 11 percent share of market for its Pepto-Bismol brand in 12 months by listening to people complain about indigestion after weekend culinary and libation binges on Facebook. The company builds social media campaigns around issues important to consumers it wants to reach [Source: Bloomberg Businessweek].
- Target uses social data to inform future marketing efforts. As published in The Power of Habit, the company is able to identify customers that are pregnant or just had a baby and then uses various marketing channels to lure them in-store to buy baby products and, since they’re already there, everything else they need. [Source: The New York Times]
The most common obstacle for companies to extract value from data is that they have too much data and too few resources.
While it may not be practical for global organizations to save hundreds of millions of transactions to gain a clear picture of the effects of pricing adjustments, for example, many industry experts believe that larger data sets are beneficial for comprehensive analysis and that new technologies are speeding up the results more effectively.
Most marketers are still not making data-driven decisions. However, big data will always be one of the tools that companies use to inform decisions, and increasingly critical one, yet just one.
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