The rise of Big Data has complicated direct and digital marketing as never before. While new technologies have increased marketers' understanding of their customer and prospect databases, the amount of data flowing into those databases is overwhelming the technology—as well as marketers' state of mind.
IBM Corp.'s “Global Chief Marketing Officer Study,” released last fall, illustrates the state of concern. Based on interviews with 1,734 CMOs from 64 countries in 2011, the study identified Big Data as the chief challenge to marketing, cited by 71% of respondents.
Also, 79% believe that over the next five years, the complexity of the data will be high or very high, but almost as many feel unprepared to handle it. The difficulty in coping with Big Data is felt even among those companies IBM characterized as “outperforming organizations.” Among those organizations, 65% reported being unprepared to cope with the explosion of data, compared with 77% of IBM's “underperforming organizations.”
“You can use some tools to get some basic intuition about data but, once you start collecting enough data, the problem lies in interpreting it,” said Ezra Fishman, director-marketing at video hosting and analytics company Wistia Inc. “It becomes exponentially harder because each part of the data tells its own story, how it combines to tell a story that makes sense to me.”
Fishman said every touch on the Wistia website and inquiry about its products is being captured by technology—he uses marketing automation solutions from Pardot Marketing Automation, augmented by advanced reporting and data warehousing from GoodData Corp.—followed by analyses that attempt to connect all these various instances of activity. But he acknowledged that ever-growing data sets can be “a mess.”
“We have at our fingertips all this data; and, in that mess, there are answers to such issues as setting up our website optimally, how best to offer free software trials, the optimal pricing for our plan and so forth,” he said. “The answers are hidden but are there. We are confident it's just about interpreting the data.” What is Big Data? According to Matt Benati, VP-global marketing at Attunity, which provides data integration software, “If it's big to you, it's Big Data.” But he added that the concept isn't new.
“Businesses have been asking questions for years that they couldn't answer unless somebody manually did something,” said Benati, who came to Attunity last fall from IBM where he served as senior director-product marketing and analytics. “But the databases were usually too large to do that manually. Now with number-crunching technology and analytics, it allows us to join together a variety of information to answer business-critical questions.”
Big Data, and the technology necessary to parse it, is already making inroads in operational efficiencies. Last month, LexisNexis Risk Solutions began migrating its insurance-support products to an in-house Big Data-processing platform to help insurers more accurately assign premiums; better understand customers and their risk throughout the policy life cycle; and drive more profitability.
In March, the federal government debuted its Big Data Research and Development Initiative, a $200 million project to better understand science-research opportunities, national defense, energy efficiency, healthcare and education, including how students learn and what teaching strategies work best.
But Benati said the advantages are just as keen for marketers.
“I run my marketing department on data,” Benati said. “These days, marketers are less heart and more science. We test our message with multivariant analysis; we look at response and conversion rates, visitors to our website and what those visits are telling us. And then we test. But the more we test, the more variables we have. It's challenging; we have maybe 50 marketing variables.”
Vendors are responding to the Big Data conundrum. Next month, Yahoo Inc. will roll out Genome, a solution to manage Big Data for advertisers—building on data from Yahoo's Interclick behavior identification and targeting service combined with data gleaned from its multiple Yahoo sites and third-party data compilers. The goal is to mine these data with predictive modeling to uncover optimal audiences.
Meanwhile, database marketing company Infogroup announced plans last month to use a data- integration platform provided by Talend that the company said would enable it to integrate client data with “a single universal identifier.” Also this spring, Lyris Inc. began using Talend solutions to streamline data management for online marketing campaigns.
“The era of Big Data that is now upon us means marketers have the opportunity to take advantage of large data sets from each channel and leverage them for deeper, actionable intelligence,” said Keith Goldstein, VP-worldwide channels and alliances at Talend. He said the Infogroup-Talend partnership will enable the capture of data “to optimize customer interactions with context and relevance.”
But challenges remain, and they're not all technological.
“The talent shortage is especially acute in the marketing department,” Phil Fernandez, president-CEO of marketing automation company Marketo Inc., wrote on the company blog. “The practice of marketing is now becoming more and more data-driven, but there are still not enough marketing executives who are truly experienced, or even comfortable, with making sense of the data and actually putting it to work to drive revenue growth.”
Big Data analytics technology must be implemented within a strategic framework and include cross-departmental coordination and senior management buy-in, Fernandez said.
Analyzing massive amounts of data from multiple touches and large prospect opportunities can provide a small edge with big consequences, Wistia's Fishman said.
“For us, it's about connecting the dots, from an initial visit to our website, to someone starting a free trial three months down the road, and finally purchasing your product a month after that,” he said. “We have lots of website visitors every day, and we convert a low percentage of those. Every incremental percent we can convert into a customer is significant.”