Sure, we're all suffering from big data fatigue. But try to forget that for a moment. The real “eureka” behind big data is this: Having information is no longer confined to merely understanding the past. Now -- for the first time -- big data offers marketers the ability to predict the future, and thus make smarter allocation decisions today. Voilá.
It may be the biggest step yet toward fulfilling one of every CMO’s deepest desires. McKinsey calls it "the biggest game-changing opportunity for marketing and sales since the Internet went mainstream 20 years ago." And researchers at MIT found that companies injecting big data and analytics into their operations achieve, on average, 5 to 6 percent greater productivity and profitability than their peers.
Yet many marketers misread the value, impact and urgency of applying big data -- and by extension, advanced marketing analytics. (For a deep dive, a good read is the newly-published Big Data: A Revolution That Will Transform How We Live, Work and Think, by Ken Cukier, Data editor of The Economist and Viktor Mayer-Schoenberger, professor at the Oxford Internet Institute, and the recent Harvard Business Review cover story "Advertising Analytics 2.0" by Wes Nichols.)
Below are six mistakes that marketers make about big data:
1. Believing a “start small” approach can succeed
Advanced analytics practices are taking hold rapidly in a highly dynamic environment. Those taking only small initial steps (or worse, no steps) will fall quickly behind. For large marketing organizations, this is a highly competitive race for scale -- a battle to unlock new forms of value, not a delicate dance of wait-and-see.
2. Embracing answers from small amounts of information
Big data beats sampling, hands down. In the past, marketers -- like everyone -- relied on small data sets, or “samples.” But you needn't settle for samples. Now it’s about using as much data as you can get your hands on, which lights the way to new insights never before available. As Cukier and Mayer-Schoenberger note, when it comes to marketing, a large body of information can teach marketers things that small amounts never could.
3. Continuing to seek data perfection
In a big data world, it's okay if the data aren't perfect. Yet most marketers still like it all neatly wrapped in pristine packages. Get over it. Big data is rarely if ever perfect, but that’s okay. Again, as Cukier and Mayer-Schoenberger point out, “the benefits of using vastly more data of variable quality outweigh the costs of using smaller amounts of very exact data.”
The accuracy obsession is rooted in the “small data” past. When you’re short on something, each piece counts for much more. A too-small sample size (or, "N") yields suspect results. But big data renders “N” irrelevant because now we can actually include ALL data.
4. Seeking cause over correlation
Marketers must understand that it’s not really about cause-and-effect, but rather correlation -- how things align in the marketing universe. If you insist on rooting out the precise “cause” of each consumer action, for example, you’re doomed to frustration.
Sure, we’d love to understand each action. But true motivation (the “why”) is utterly elusive. Instead, with the help of big data -- and the appropriate mathematical models -- what marketing organizations can uncover are patterns and associations that help predict what will happen next time. Correlations are visible; causes less so.
5. Thinking it's only about digital
Big data enables the best tools yet to understand and quantify the impact of marketing efforts, and to make better, more informed decisions on where to spend future marketing dollars. But the so-called “datafication” of almost everything isn't confined to digital. Yes, the data itself is digital, but much of it represents things that happen in the analog world. In short, we can now "datafy" things we never thought possible. Social media, for example, have datafied personal relationships, recommendations, business networks and more.
6. Mourning the loss of creativity and common sense
They aren't going away. Instead, they will be even bigger differentiators in the future. Contrary to many a marketer’s mindset -- big data actually heightens the need for creativity and common sense, rather than hammering it over the head. (Here’s a good video on “Art vs. Science in Marketing Analytics.”)
Eventually, when most marketers are using advanced analytics and other big data tools, those who can fill in the imperfections creatively, will hold the edge.
Title image courtesy of alphaspirit (Shutterstock)
Editor's Note: This is the first in our month long look at big data and analytic's role in marketing.