Last week I visited with fellow technologist and Big Data evangelist Flavio Villanustre at LexisNexis. During the visit we discussed advances in data-driven marketing, a topic that I’ll be covering with a panel of experts at the upcoming OMMA Atlanta conference.
Here are some of the big takeways from our conversation:
- The biggest challenge that marketers face today is having access to data. The more data one has, the better data models one can build. And better data models drive better predications. Marketers must take every opportunity that they are given to collect and share data.
- The role of unstructured data (eg; photos, videos, audio) in data analysis will increase over time. For example, Google announced in 2012 that researchers used 1,000 computers to find cats in pictures. The impressive thing about this finding is the ability of computers to identify a particular object with accuracy without human intervention. This level of machine learning demonstrates that computer-enabled data analysis is something that we can take advantage of in the not-so-distant future!
- We are recognizing the value of predictive analytics. While descriptive analytics, or the collection of basic metrics (eg: visitors, page views, leads, likes, +1’s, pins, etc.), is important to understand what’s happened in the past, companies want to leverage data to predict the future and drive more revenue/increase profit.
- A very small number of companies worldwide (only 3%; according to Gartner Research) are beginning to use prescriptive analytics. Prescriptive analytics is a complex type of predictive analytics that allows one to test out multiple marketing models. It provides an optimal solution given a set of objectives, requirements and constraints. This is where say a company can test the impact of various promotions/discounts and shipping rates on a customer’s purchasing behavior.
- Marketers have to accept the successes (and failures) of data-driven decisioning. We hate to turn decisions over to a computer because we believe that we’re smarter — we’re human after all! Unfortunately, computers typically beat our “gut feel” — our intuition is just inherently faulty (according to HBR). Marketers need to accept that we’re biased and that we must adopt a “test and optimize” processes where the answer from one set of marketing experiments inform the next set of experiments.
It is easy to see how these advances in marketing — whether it is through the introduction of marketing technology platforms, data collection practices or data analysis processes. While it is tough to predict the future (thanks Yogi Berra), I believe that marketers that ignore data-driven decisioning are poised to lose (in the long run).