You must know your numbers and data-driven marketing helps.
Data-driven marketing supports your decisions, strategies, and budgets.
Analyzing markets to determine what consumers want is a never-ending quest for most businesses. The data collected and sorted from various sources such as social media, polling, and cloud-based computing has enormous value for every company that can interpret the data in a meaningful way. Because data is growing each day as a major resource for most businesses, a new model for conducting business has emerged called the data-driven business model (DDBM).
Currently, there are gaps in understanding how this data can create value for businesses, mainly because of a serious lack of academic work done by scholars on this topic.
Most of the studies have been funded by IT companies or consultancies, and as such, they are very specific, catering to professionals instead of students. Therefore, there is only one way to start playing the game: find an employee or agency that can deliver the goods.
Finding the people who can help you properly manage your data is key because obtaining big data is only one part of that value equation Ė you must also be able to comprehend insights from the information you gather.
Once your algorithms have sorted the data, interpretation may begin.†The key here is to determine and†a couple of factors. The first one is the reliability and relevancy of the data. Your analysts have to decide if the data is reflecting reality and if it does, how is it connected to your business?
Having people on your team that are able to put a human touch to the data is vital for ensuring it accurately reflects your present market realities.†
What is data-driven marketing?
Data–driven marketing is built on insights pulled from the analysis of big data, collected through consumer interactions and engagements, to form predictions for better decisions.
The Dreaded Scope of Data–driven Marketing Strategy
Understanding the enormous scope of this data is important. This is not like going through a couple of thousands or even millions of numbers. Weíre talking BILLIONS of data points here. In fact, as seen in the infographic to the left from the US Chamber Foundation, in our world today, the amount of data generated in two days is as much as all data generated in human history before 2003.
For example, LinkedIn is supporting 300 billion events, connecting thousands of individuals each second. Uber is optimizing routes for thousands of drivers and clients simultaneously in order to provide the best direction. Amazon has to calculate millions of orders, shipments, and transactions each day.
Extracting information from such huge pools of data can be tricky, considering the constant stream of outputs and inputs constantly fiddling with our findings. Some startups, like Confluent, have been working on finding a solution for this problem, theyíve named it the Ďístream.íí Essentially, itís a routine within the data model, allowing for extracting information without compromising the constant need for input, allowing a flexible approach towards data gathering.
Molding the Strategy through Data-driven Marketing.
Be mindful when using data to your advantage. Humans are emotional in nature, some more than others. This can prove to be a tricky flaw inherent to us, especially when itís time to look at the raw data relevant to your business.
Often after looking at data results, we turn to our HiPPO (highest paid personís opinion) for answers on how to move forward. DDBMs have a direct clash with the HiPPO solely because of the way they reason and make decisions. The HiPPO is usually driven by experience and his own philosophy on how business should be done, while the DDBM has evidence and data to inform him on the correct path.
Itís highly important to understand the intangibles within your business as well. Many solutions will require a mix of data-driven actions and intuitive thinking, such as website development, branding, and marketing.
Most of the time, the data thatís available to you is strictly focused on your business and your direct environment, and focusing solely on yourself can be shortsighted. Because you wonít have all of your competitorsí data available to you, your employeesí market insights can help you sculpt your data-based decision making.
Think Big, Think Wide.
In addition to the foibles of the DDBM Iíve mentioned previously, there is also another limitation that DDBM presents: long-term decision making. Sure, you can extrapolate some information that can give you some curves and graphs in the long run, but the market is a living thing.
A lot of non-data related events may impact your business, such as monetary stability, geopolitical stability, competition, governmental intrusions, etc.
Always try to combine the best of both worlds. Set a goal for your business and see how the data reflects it, modify your goal according to your parameters, and realistically you should reach it.
In my opinion, this is the best way to handle a DDBM in the most profitable way. Finding nooks and crannies to optimize your profit is time-consuming and often not worth it, so just let the algorithm do the grunt work while you only weigh the options in a way you see fit.
How will it Impact Key Industries?
It is interesting to imagine all the possibilities that can occur when you start realizing the true potential of DDBM. Whether some think that it is obscure or in plain sight – this technology is on track to impact all industries in one way or another. I will name a couple of big industries that will most certainly get see major changes due to the data-driven marketing model.
Technology has effectively shocked the music industry with the rise of streaming, social media and online platforms like Apple Music and Spotify. The modern music industry is thirsty for a way to provide its consumers with relevant and personalized experience.
DDBM will use the gigantic databases within such services to create a sharply-tuned algorithm that will easily suggest just the right tune or emerging artist to its listeners based on their previous listening habits, providing them with pleasant, personalized user experience.
TV and Movie
The TV and movie industry has taken a curb from traditional means of consumption like watching cable and going to the theater. Businesses like Netflix and Amazon have made big data critical in selling their services.
Much like the music industry, DDBM will provide the television/streaming industry with more precision in offering the right content to its subscribers based on what content theyíve enjoyed in the past. This, however, doesnít mean the quality of the content will increase – this is advanced sorting, not content creation.
Publishing and Digital Media
A steady influx of new internet users has spiked the need for data for the publishing and digital media industry. Writing on-demand has taken hold, causing the amount of content to grow steadily each year. Your data-driven marketing metrics will tell you if you are on track or not.
The model here will include implementing algorithms to assist with analyzing keywords and topics that interest readers. Companies like Audible can then use this information to ensure their content resonates with their target audience – again in a similar way to the aforementioned industries. Readers will get the best filter for their experience.
Finally, these industries collide within the promoter of all – the marketing business. Marketers are already using data and advanced marketing technology to determine what tactics will best connect with their target audience and give them their greatest return on investment. Data provides consumer insights that can be applied to almost all aspects of marketing strategies for marketing campaigns.
The DDBM can help marketers better understand key aspects of how and where their audience consumes information, allowing them to create more tailored content that builds stronger relationships between businesses and their customer base.
Essentially, it allows marketing to have a broader influence and mold the product with more control. Measuring costs-per-click and other relevant metrics allow a hands-on approach to fine-tuning your campaigns, adding another layer of nuance to the marketing industry.
Wrap up on Data-driven Marketing Strategies
Data-driven marketing will help you support your decisions and get you a better ROI from your marketing programs.
Right now, DDBM is a state-of-the-art approach to business, but I see major potential for it. A software of higher sophistication in both math and processing power can do most of the thinking for us – capable of making a complex decision in a quick and accurate fashion. But those are big dreams – itís better to stay realistic.
DDBM is still in its infancy, and only the biggest players can use it to its current potential. This is no cause for concern, most trends require technologies to prove themselves on a large scope initially. The important thing is to realize the possibilities this model offers and prepare accordingly for the incoming must-haves.
However, this article is a heads up regarding the upcoming tools that may ease many headaches we have right now when we want to turn the profit. Chances are if you are not using a DDBM now, you most certainly will in a couple of years!
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Have something to say about your thoughts on data-drive marketing?
Data–driven marketing†is built on insights pulled from the analysis of big data, collected through consumer interactions and engagements, to form predictions for better decisions.
What is marketing attribution?
In marketing, attribution, also known as multi-touch attribution, is the identification of a set of user actions (“events” or “touchpoints”) that contribute to the desired outcome, and then the assignment of a value to each of these events. The digital marketing agency in Denver provides help with marketing attribution models.
What is the marketing attribution model?
An†attribution model†is a rule or set of rules that determine how credit for sales and conversions is assigned to touchpoints in conversion paths.†
Why is marketing data important?
Marketing data†helps you to understand your customers better. Building a comprehensive knowledge of your existing and potential customers is essential if you are to provide them with the best possible product or service.