Marketers cannot afford to ignore big data

We are living through a data-led revolution in marketing. From the early days of Tesco’s Clubcard in the 1990s through to today’s data-led companies such as Amazon, Uber and Airbnb, data has changed from being a useful addition to become the starting point of almost every marketing strategy.

“Big data is highly important to today’s marketing department,” says Paul Davies, chief marketing officer (CMO) at Microsoft UK. “Nowadays, consumers are digitally savvy and platform agnostic – they are elusive shape-shifters who make today’s marketing certainty tomorrow’s fallacy and there’s no such thing anymore as a predictable audience for anybody’s advertising campaign.

“However, since we now have the technology to analyse the fragmentation of the consumer landscape and track these shape-shifting customers, we can use big data to create insights for precision marketing and a tailored customer experience.

This is the age of the all-digital customer and it is dramatically changing how we connect with them

“When it comes to providing these tailored experiences, big data is critical. Gut feelings are great and power a lot of creativity. But these need to be paired with data-driven insights for a company to be able to create the experience its customers want, as opposed to what the CMO thinks they want.”

What is more, big data is getting bigger. As Mark Moebius, vice president of marketing at Dell in Europe, the Middle East and Africa (EMEA), says: “No less than 90 per cent of all the data in the world has been generated over the last two years. All of us, as potential customers, leave footprints everywhere. This is the age of the all-digital customer and it is dramatically changing how we connect with them.”

Types of data being collected for data-driven marketing initiatives

Targeted journeys

To give just one example of this, using data insights delivered 3,617,000 new prospects and £12.7 million in value to The Economist magazine. “The marketing team there used intricate data, analytics and insight to create smooth, highly targeted prospect journeys all the way from rival current affairs sources through to subscriptions to their own magazine,” explains Rachel Aldighieri, managing director at the Direct Marketing Association. “The team produced more than 60 headlines for online ads – some written at near real-time as major
stories broke – targeting them at seven distinct audience segments to encourage them to register and subscribe.”

Indeed a survey conducted by The Economist Intelligence Unit for SAS reveals UK organisations that have a well-defined data strategy reported their company’s performance as substantially ahead of peers in the most recent financial year. According to the report Big data: Forging corporate capabilities for the long-term, more than 35 per cent of respondents with a well-defined data strategy reported stronger financial performance than their competitors.

Where competitive advantage has been achieved as a result of data-driven marketing

There are, though, as many challenges as opportunities with using big data for marketing. Until recently the most pressing issue for many organisations was the need to collect, store and manage that data. Yet this is changing. For many organisations the key challenge is now building the skills needed to extract insight and commercial value from data.

The risk of wrong interpretation

As Mark Robinson, chief executive of deep data analytics and real-time marketing platform deltaDNA, says: “It is a real art turning high volume and complex data into actionable insights. It requires a rare combination of technical skills and business consulting. To get the most out of big data, you need to analyse raw event data. Quite simply, the sheer volume and complexity of this data, the specialist tools needed and the potential for misinterpretation present issues for many marketers. For example, small mistakes in classifying cohorts can lead to a completely misleading interpretation.”

The SAS report supported this view, with 29 per cent of respondents reporting the most significant challenge in using data effectively is engaging creative employees.

“To unlock value from data we need high-quality data scientists and data-visualisation experts, which is why we recently acquired a consultancy called Synergic Partners,” says María Sánchez del Corral, CMO at Telefonica. “The best CMOs are now looking for Hadoop, Spark, Tableau and Carto experts rather than just recruiting social media gurus or SEO [search engine optimisation] specialists. This enables them to convert this abundance of data into actionable insights, tailoring online and offline campaigns, and modifying pricing in real time.

“Having technical experts in-house opens the value of data to the whole marketing department with dynamic visualisation tools and dashboards so they can base their daily decisions on what the data says, rather than instinct or opinion. This is the era of the data-driven marketer.”

On one level this is about establishing a culture of collaboration. Mr Davies at Microsoft describes how his marketing team needs to be connected with every part of the business to share insight derived from data. He also highlights the important role that technology can play in helping them to connect the dots.

Dell’s Mr Moebius agrees. “We need to ensure our teams have the right technology and tools to analyse the data and draw out the insights it can offer,” he says. “We established a cross-functional organisation that leads business intelligence and analytics, working across marketing and IT. This has increased the technical and marketing skills of both organisations and created common ground for joint initiatives. Eliminating silos gives us the ability to move faster, take more risks when it comes to marketing IT and, ultimately, better serve our customers.”

Communicating the value within the organisation

Dipesh Patel, information and analytics director in human resources at Unilever, has gone even further. “My team has been giving the business the tools and information they need, but we wanted to ensure it genuinely made a difference,” he says. “So I brought in a consultancy, OPX, to help us better communicate to the business the existence of our function and the insight we can deliver to them.”

They began by developing an engagement strategy, and then moved on to train the analytics team on how to talk to the business about their work, and to develop a positioning statement and proof-points around it. This work led to new ways of engaging, especially using Unilever’s internal social media, and Mr Patel reports significantly increased understanding and use of the powerful insights his analytics team is producing.

Just as information directors are becoming adept communicators, so we are seeing CMOs become increasingly skilled manipulators of data. “Marketing departments are undergoing a tremendous shift thanks to the emergence of big data and as a result the skills needed are changing dramatically,” observes Jen Brett, head of EMEA insights for LinkedIn Marketing Solutions. “While CMOs don’t need in-depth technical skills themselves, an understanding of the role of big data is crucial in building the right team.”

Key skills for today’s marketers

Earlier this year LinkedIn worked with executive search firm Spencer Stuart on identifying the skills needed for the modern marketing team. It revealed very clearly that today’s key skills for marketers include data analytics, social media, apps, brand and digital channels, prioritising customer experience and data intelligence.

No marketer can afford to ignore big data and the challenge is to develop the skills needed to compete in this changing world

This is exposing gaps in many CVs. “LinkedIn data reveals a clear skill gap within marketing, particularly when it comes to skills such as marketing automation, ad serving and behavioural targeting,” adds Ms Brett. “CMOs need to focus on upskilling their existing teams in these areas, as well as being explicit with their recruitment teams about the specific skills they are looking to bring in. The next step is to develop and retain that talent and ensure development and progression plans still work for those with more technical skillsets.”

An unmissable opportunity

87 per cent of marketers consider data their organisation's most underutilised assetThe issue is likely to become even more critical with further technological developments such as the internet of things. “Within insurance, the internet of things will inextricably move the industry from modelled to measured data which is truly transformational,” says Mark Evans, group marketing director at Direct Line Group.

“Driverless cars and connected homes will become a reality in the next two to five years and this means insurance can transcend from a reactive restitution service into a proactive prevention service. This is truly exciting for those who are able to adapt to the changes and, in a Darwinian sense, the world is getting more and more interesting for marketers as a result of big data.”

No marketer can afford to ignore big data and the challenge is to develop the skills needed to compete in this changing world. As Nick Gregory, CMO of IRIS Software, concludes: “The amount of information available to marketers is seen as an opportunity which can’t be missed, but it’s also the graveyard for many marketing departments unable to handle the complexity of managing big data.”


Case study - Expedia

Andrew Cocker, senior marketing director for Europe, the Middle East and Africa at Expedia, describes how big data is changing the work of his department.

He says: “Big data should be at the heart of any modern marketing department and it’s at the heart of what we do at Expedia. By putting data-driven hypotheses and testing at the centre of marketing decisions, organisations are able to optimise quicker and more often using powerful data and insights to evaluate new ideas and make decisions, rather than relying on positional or functional authority within the organisation.

“From a creative point of view, using data and insights gives our marketing team the freedom to create multiple campaign options in order to see which receive the best signal. We also use sequential messaging and dynamic ads in our intelligence-based marketing approach – if customer does X, then we serve them Y message, which requires the engineering and product teams to create the back-end and infrastructure to make this possible.

“As we focus heavily on the data, we’re always looking to balance this approach with emotional storytelling to help cut through in the marketplace and bring our overall purpose to life.

“It’s not enough to simply say that your department is data driven; a focus on the data must permeate every decision the marketing department makes and that requires strong leadership by example. CMOs must also not be afraid to invest in their staff to supply them with the skillsets to truly understand and action the data they’re being presented with.

“Data analytics skills are becoming more and more important to marketing roles, and the same is true of the role of the CMO.”