Big data is an interesting question that marketers do ask us about, but they’re still a little bit confused about what big data means. And what I like to think of is that it really is about– it’s the answer to the questions that they need to ask. And so to me, the bigger issue around big data is making sure the marketer is asking questions that big data can then provide the answer to. So we know it’s big. We know it’s important. But it doesn’t provide value unless there’s an answer to a business question.
So one thing I think of is that in the age of the customer, big data will solve some of the answers to questions that the age of the customer brings up. But you need to do it in a thoughtful way. So you have to go back to the original objectives of a CMO. They have to worry about growth, they have to worry about profits, and have to worry about how they compete. And by thinking about those three things, and in looking at how big data is going to help solve those issues, that’s where big data becomes important.
So how do you grow your revenue? You grow your revenue by finding opportunities that you may not be mining as effectively as you could. How do you increase profits? You find operational efficiencies in the way that you’re delivering that value in a way that customers recognize as valuable, and you stop doing the things that customers don’t think is valuable anymore.
In terms of how you compete, you find the things that are disruptive to the business that you, uniquely, can provide. And you start accelerating those efforts and reducing the impact that previous efforts that were considered to be fundamental to the business that may no longer be necessary. You look at those things because you know the competition is coming. And data may provide the answer to where you can push a new lever and go in a new direction.
Big data is the foundation to a couple of things that are good marketing practices and things that we’ve talked about for a long time, but now the data actually exists to do it. Things like being able to do one-to-one marketing. Being able to really understand the life cycle value of a customer and be able to manage that life cycle in a way that provides the clarity of understanding. If you take an action here, what happens to the more valuable, or potentially less valuable, customers in terms of what their next step is going to be. It helps you understand conversion rates and how people flow through your system. And ultimately, it helps you manage the business better.
In a big data world where you actually get that two-way feedback on a real time basis, it’s much easier to look beyond segments to behaviors and to emotions that might be experienced at a particular point in time. So you’re not looking at segments purely on age and gender and geography, but you’re actually looking at segments based on weather and physical location and potential emotional state.
And the ability to do that and target messages is much harder. The customization of the message needs to go much deeper. But the idea that you can relate to somebody in a digital context is far more powerful than what we’ve been able to do in the offline world. And again, you may spend more money on that particular ad, but that ad’s going to be much more relevant and, therefore, effective than the mass advertising that reaches everybody whether they’re in that proper state or not at the time you’re reaching them.