Most business leaders agree that more data is usually a good thing for business. Data can improve competitive advantage, identify inefficiencies or be the impetus for an entirely new product or service. However, just because you have data doesn’t mean you can use it. A new study has found that a significant majority of companies are not able to take advantage of the data they are collecting and, even when they attempt use the data, many are struggling to analyze it.
Measuring Opportunities for Business Success
Massive detailed data sets are no longer just of interest to statisticians and data scientists. Many businesses have realized that big data can yield enormous business benefits. This promise of improving competitive advantage has driven modern organizations to collect more data about their customers, operations and performance. You might assume that, with all of this data lying around waiting to answer even the most ephemeral of questions, businesses can become their own oracles -- predicting the future with a single well-formed query. However, that is not the reality, especially when it comes to marketing.
Marketers are often on the front line of trying to drive business growth. 55% have shifted more than a quarter of their marketing budget from traditional to digital advertising because of its:
- increased measurability and accountability
- increased customer engagement
- lower cost of customer acquisition
The shift has given modern marketers better access to information such as real-time customer behavior, sentiment and preferences. Yet, a new study, “Marketing in the Digital Age: Winning with Data & Analytics,” conducted between December 2011 and February 2012 of over 300 business executives, found that a lack of analytic skills and appropriate technology are keeping marketers from optimizing the use of all the new data being collected.
Although 82% of respondents believe that digital marketing has the potential to provide better customer behavior insights than any other type of marketing, and that the customer data is valuable across their organization, 70% of respondents indicated they were not able to make even adequate use of the data they collected. Further, 46% of respondents said that they lack the information to confidently tell their leadership what digital marketing efforts are most effective.
Getting Big Data to Make a Difference
Are marketers just being overzealous with their benefit expectations of big data? No. The insights hidden in big data can create business value in a number of ways:
- creating transparency, which can accelerate and improve decision making
- facilitate experimentation to discover needs, variability or performance improvements
- creating highly specific segments and targeting products and services to their needs
- substituting or amplifying human-decision making with big data backed algorithms
- driving innovation in business models and offerings
Although these things are possible, there is a gap between what could be and what is, which is negatively affecting return on investment and competitive position. Organizations that are successful will adjust their practices and processes to create a holistic ecosystem that includes not only marketers, but also agencies, publishers, technologists and analysts. Companies must make it a priority to improve their processes, tools and talent if they want to benefit from their data instead of hoarding it.