Today's hyperconnected customers may be rushing well ahead of marketers' ability to understand and adapt to their needs. That, according to presentations at the Direct Marketing Association's NCDM (National Center for Database Marketing) conference and expo last month, is prompting marketers to make an organizational commitment to harnessing Big Data.
“There is a perception gap between what marketers know about their customers and reality,” said Brian Solis, principal analyst at consultancy Altimeter Group, in the opening keynote at NCDM, held Dec. 3-5 in Kissimmee, Fla. “Yes, connected customers want traditional things like good service and products, but also human things like conversations, relationships and, most important, a sense of value and benefit in connecting with you.”
Solis urged that companies adopt a top-to-bottom organizational commitment to understanding the data flowing from these customers to better craft products, messages and feedback.
“Content isn't king; it's context that's king,” Solis said, noting that Big Data can reveal the how and why of purchase histories. “Without that, marketers can't make campaigns more relevant.”
One central message at this edition of NCDM was that it's not enough to merely recognize the impact of Big Data, companies must understand the information for what it has become—one of their most important corporate assets that requires detailed internal governance about where it resides, who owns it and how safe it is.
“It is essential that organizations unify their data in order to govern it,” said JoAnne Dunne, CEO of data segmentation company Alliant Data. “Digital data is in its own silo; direct marketing data has its own location; and so do brick-and-mortar operations. Companies must make the data structure holistic.”
Speaking at a session titled “Doing Data Governance Right,” Dunne recommended that companies create data governance task forces that include privacy and compliance officers as well as legal counsel, IT, marketing, sales and human resources.
Such task forces may be one way to placate these various contenders for Big Data ownership status, said Bruce Biegel, senior management director at Winterberry Group, a consultancy.
“There is a growing awareness of the need for data governance, but there's a continuing challenge about who owns the data and its various silos,” Biegel said. “And since advances in marketing technology are outpacing the talent available, what you can do with data governance is far ahead of what you are doing. The risks of accidents are starting to increase.”
Such accidents—combined with other dangers such as hacked databases, identity theft, leaked passwords and phishing schemes that reveal corporate secrets—are prompting greater focus on internal data best practices, Biegel said.
“There is a large investor risk,” he said. “When you have a breach, your reputation can be damaged; customers will leave; and the value of the company declines.”
Biegel noted that companies often rely on multiple third-party service providers to house and manage different data segments. “And they're not talking to each other,” he said. “It's critical to have a point person within the company for these providers to talk to and coordinate with.”
Internal governance is especially important as marketers' collection and use of data attract increased scrutiny from the government. Congress is considering multiple pieces of legislation that would regulate online behavioral tracking for advertising purposes, as well as the use of customer data. Meanwhile, the Federal Trade Commission is conducting an investigation with an eye toward imposing rules on the industry if it doesn't regulate itself adequately.
“Marketers are possibly facing the end of the data-driven way of life as we know it,” said Rachel Thomas, the DMA's VP-government affairs speaking on the panel. “There is the view that any company that collects, aggregates, analyzes or shares customer information is potentially suspect. A primary belief behind this is that marketers aren't capable of acting as responsible stewards of data.”
The DMA and other marketing organizations are lobbying against government regulation of marketing data, arguing that the industry can regulate itself.
“If we don't get all these issues right, we'll lose the ability to self-regulate,” said NCDM panelist Peg Kuman, CEO of data management company Relevate. “Then data will become too expensive and marketers won't get any value out of it.”