Digital marketers seeking new ways to gain a competitive edge should look at capital markets firms for inspiration. Financial traders’ rapid embrace of real time analytics and data visualization holds many lessons for tackling the data challenges that now hamstring the effectiveness of online marketing.
The Vanishing Luxury of Time
Capital markets experienced a technological transformation towards real time analytics following the last market crash. Pre-crash, there wasn’t an urgent need for real time data analysis for things like understanding risk exposure and portfolio structures because latency was built into the system. Traders had the luxury of time. They could wait days to read reports and other market data before evaluating and modifying their positions.
But then the market bubble burst and those firms that were heavily invested in subprime derivatives were catastrophically, if not mortally, wounded. Those who survived the crash knew they had to take latency out of the equation. They had to quickly adopt new technologies that would let them evaluate their portfolio and risk profiles literally as they were changing.
A similar phenomenon is now overtaking marketing. Before the Internet and the ubiquity of mobile connectivity, the industry was heavily weighted on print; latency was built into the marketing plan. Companies could kick back and observe trends over a month’s or quarter’s time and adjust their marketing programs accordingly to address the results.
With the emerging dominance of online marketing — especially where key younger demographics are concerned — latency is becoming a debilitating condition. There can no longer be any delays between the time a potential customer decides to purchase or engage with a company and the time a marketer sees it happening. If marketers cannot capture that consumer’s mindshare the moment it is forming, they face the same fate as pre-crash capital markets.
The Big Data Challenge
But as financial traders learned, real-time analysis is a complicated big data challenge. The ability to analyze consumer activity in aggregate across an entire market involves high volumes and varieties of data points. Even more challenging is the velocity of that data. Marketers need new tools for making sense of data “in motion” in real time.
Capital market firms learned that traditional data warehouses and business intelligence systems don’t cut it because they require capturing, transforming and loading the data into a database that can then be queried after the fact. In the rough and tumble marketplace of online retailing, even delays of a few seconds puts marketers at a competitive disadvantage.
Marketers need up-to-the-second visibility into who their website customers are, what call-to-actions or content they engage with, and what ads and incentives will trigger them to convert. They also need to assess how their affiliate networks are driving traffic, as well as pulling in more qualitative unstructured data from social media, mobile applications, Amazon reviews and the like. Wait too long to sort out all these data points and competitors will step in and steal customers away.
For financial traders, getting latency out of the decision chain was the primary impetus to radically transform their technology platforms. The typical transform and load latency of database-centric systems were supplanted by new kinds of real time analytic tools that could capture and visualize huge volumes of raw data streams in motion; everything from complex event processing (CEP) engines and message queues, to tick databases and unstructured social data.
Traders could now evaluate large portfolios of complex financial instruments in real time for risk exposure, liquidity management, rogue trading and other factors with split-second accuracy because data visualizations provided the visual filters for revealing unseen patterns and outliers.
Latency in Marketing Automation
After purging latency problems, however, traders faced another upheaval in their world; a change that is only now coming to full force in the world of marketing — automation. While the image of roiling traders shouting orders on a frenzied trading floor is practically a cliché, the truth is that most trading today is carried out by jousting computers executing sophisticated algorithms. A similar phenomenon is overtaking online marketing today and CMOs would do well to take a page from the financial world’s playbook on this front as well.
For marketers, latency in an age of programmatic advertising is still the enemy — perhaps even more so. Take real time bidding, for instance. Algorithms rule when offers and opportunities to buy ad placements are being made on the fly in the time it takes a prospect’s Web page to load; human timeframes for decision making are simply out of the question.
- Endangered Species: The Corporate Intranet
- Discussion Point: Why Would You Buy a Proprietary CMS?
- Beware Red Herrings: Intranet vs. ESN is a Sham
- Microsoft's New BI Tool Plays Nice, Even With 3rd Party Vendors
- Microsoft Shops Again: Buys LiveLoop, an Office Collaboration Start-Up
- Are These Vendors the Best at Social Media Monitoring?
- Big Data Gets Big Money for Big Reasons