CMOs: 3 Keys to Extracting Value From “Big Data”

If you’ve got analytics, you have insights waiting to be discovered. Are you finding them and using them to drive value for your business?

There are few things as full of hype, promise and sexiness as “big data” and we have more data than ever before, yet marketers are challenged to parse terabytes of noise to get a megabyte of signal.  Too many practitioners are focusing on reports and dashboards instead of analysis, and not reaping the promised benefits.

I am a student of the art and science of digital marketing, which is increasingly driven by the principles of decision science and continuous improvement that have informed my career in large-scale content production management. I am currently studying Social Media Marketing through Northwestern University. The purpose of this blog is to both practice the craft and share the best bits of what I’m learning along the way. Today’s catch includes 3 tips from two of the industry’s top minds on how to get the biggest bang for you big-data buck.

#1) Use the Scientific Method

Andy Crestodina at Orbit Media Studios challenges would-be big data mavens to do more than monitor reports and truly embrace the analytical process by doing the following:

  • Get a marketing idea
  • Ask a question that supports the idea
  • Find the report that provides the answer
  • Proceed with the idea (or reject it) based on the answer
  • Measure the impact

In short, Andy suggests following the scientific method which includes forming a hypothesis, challenging it with data, and using the resulting insights to make better decisions and do better marketing.

Andy Crestodina

“There is an ocean of data in your Analytics. And it’s fun to swim in the ocean. But it doesn’t really get you anywhere. If you’re just looking at reports, without answering questions, testing hypotheses or drawing conclusions, you’re not doing Analysis.”

– Andy Crestodina

 

He then goes on to give an easy to follow example of this process for each of the four reporting categories found within Google Analytics; Audience, Acquisition, Behavior, Conversions.

For example, do you think increasing social media activity might generate leads? Ask the question, “Which social network refers the most engaged visitors to our site?” A Google Analytics Acquisition report can tell you where referrals are coming from, what pages they are visiting, and how long they stay, and whether conversion rates vary meaningfully from other sources. The answers can determine whether it makes sense to test the idea. If so, measure the impact and see if the original hypothesis is proven correct. Either way, you can repeat the process to further refine the strategy’s performance or explore other options, compiling valuable insights on what does and doesn’t work along the way.

Read the full article “Google Analytics Reporting vs. Analysis: Insights From 4 Reports

Big Data Mountain

Anyone entering the realm of digital marketing and analytics will soon recognize Avinash Kaushik as a key thought leader in the industry. On his blog, Occam’s Razor, Kaushik has written extensively on how to use big data to find insights that drive action with timely value.

In his blog post, “A Big Data Imperative: Driving Big Action“, Kaushik acknowledges the potential and the challenges posed by big data.

Avanish Kaushik

“It is great that we have big data. It is greater that we have such amazing promise in that big data. It is sucky that almost no one knows what to do with it in the context of driving actual business value.”

– Avanish Kaushik

 

 

#2) Invest in people, not tools (the 90/10 rule)

Kaushik is adamant that for every $100 budgeted to invest in making smart decisions, invest $10 in tools, and invest $90 in big brains (aka people).

Don’t build the biggest, baddest big data environment over 32 months, only to realize it was your biggest, baddest mistake.”

Computers and artificial intelligence are simply not there yet. Hence your BFF is natural intelligence.

Let the 10/90 rule be an inspiration to simply over-invest (way over-invest) in people, because without that investment big data will absolutely, positively, be a big disappointment for your company.

While systems and tools can provide access to massive quantities of data, with ranks of impressive reports and dashboards, actionable insights that drive value remain the province of the analyst. Be sure to invest your budget accordingly.

#3) The Digital Marketing and Measurement Model

To aid “big data revolutionaries” in their quest, Kaushik has published a five-step framework called “The Digital Marketing and Measurement Model”, which contributes to structured thinking about what the real purpose of a campaign is, and the determination of an objective set of measures with which to identify success.

  1. Identify the business objectives upfront and set the broadest parameters for the work we are doing. Sr. Executives play a key role in this step.
  2. Identify crisp goals for each business objective. Executives lead the discussion, you’ll play a contributing role.
  3. Write down the key performance indicators. You’ll lead the work in this step, in partnership with a “data person” if you have one.
  4. Set the parameters for success upfront by identifying targets for each KPI. Organization leaders play a key role here, with input from Marketing and Finance.
  5. Identify the segments of people / behavior / outcomes that we’ll analyze to understand why we succeed or failed.

Follow this link to read the full text of Avanish Kaushik’s post on “The Digital Marketing and Measurement Model

Remember these 3 keys to driving value from big data

  • Be Scientific: Start with an idea, convert it into a question, find a report that answers it, reject or proceed with the idea, and measure the impact.
  • Invest in People: Direct 90% of your analytics investment in people, who are your source for actionable insights.
  • Follow the Model: Define the objective, set goals, document KPIs, determine success parameters, identify causes for success or failure.

Follow these three principles and make the difference between good and great marketing.


 

Nick Krueger is a 17-Nick Kruegeryear veteran of the analog magazine publishing and retail marketing communications business, with the last 9 years managing the execution of print marketing programs at RadioShack. 

Nick has a B.S. in Operations Management from the University of Memphis, an M.B.A. from the University of North Texas, and is currently enrolled in Social Media Marketing with Northwestern University via Coursera

You can find Nick at LinkedIn, Twitter, Google+, and Facebook.

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Applying the MoR Test to evaluate social media strategy

There is a reason Avinash Kaushik is one of the foremost thought-leaders in the world of digital marketing. With roots in research and analytics, Kaushik quickly cuts to the case, using metrics to quantify the real-world value of specific campaigns.

In his article, “How To Suck At Social Media: An Indispensable Guide For Businesses” Kaushik suggests many firms rush to social media merely because its there, connected to a large audience, without a clear rationale for why it makes sense to do so, resulting in lackluster results. For example:

Google’s Small Business page on Facebook the average “Amplification Rate” (the rate at which their followers share their content with others) is virtually zero – and the “Applause Rate” (Likes per post) is usually under 10. We’re talking Google here, and that’s how low the numbers are.

Google’s AdWords made over $35B last year, and their Facebook page has over 420,000 ‘Likes’, with the team generating new posts every day, yet usually generates zero shares.

Kaushik cites additional examples, including GE, which enjoys KPIs near zero for its own Facebook presence, begging the question, “what business value, brand or performance, was delivered?”

general_electric_facebook

This leads to Kaushik’s proposal of the “MoR Test”, as a first-step in evaluating a firm’s investment in social media strategy, which is defined below.

MoR Test

It is pronounced the more test. It is an acronym for a test I often use in my consulting engagements. It stands for: Money off Roof test.

It is a simple test: Would we create more Social Media activity if we took all the money we are currently investing in Social Media and threw it all off the roof of our office building?

The way it works is that you compute the total cost of your Social Media program: SM employee salaries and benefits, agency fees, content acquisition/production costs, analyst salaries, executive time invested etc. Then, you withdraw that amount of money in $5 bills. Now you take the elevator, or stairs to be healthier, to the roof of your office building. During prime time, say noon, you throw the cash, off the roof. Surely, when cash is floating down from the sky, people will grab it and tweet it, write posts on Facebook, post pictures on Instagram, and of course videos on YouTube. Measure all this Social Media activity.

If the Social Media activity is more than what you are currently getting on your current social platforms, why are you on Social Media? If you simply want buzz, you are better off just throwing cash off your office building once a month. No?

The serious point is that when we choose to invest in Social Media, it comes at a cost. Not just what we are investing on Social Networks, but also what else we are not doing. The opportunity cost . Many companies don’t have mobile friendly websites. Their mobile apps, if they exist, are atrocious. When you search for them, if you find them, you end up on sub-optimal landing pages. Most don’t have decent display advertising strategies with Yahoo!. Their email marketing programs are, literally, leaving money and customer love on the table. Some have the worst lead gen page known to womankind. But. They have a regular presence on Social Networks.

If they fail the MoR test, why not take that money and invest in the aforementioned six ideas? The brand and performance ROI to the company is clear and direct.

Yet Kaushik goes on to highlight a number of cases with companies passing the MoR test including; Innocent, Carphone Warehouse, GoPro, and Mailchimp – providing analysis on each and factors for success (or lack thereof). I highly recommend reading for any social media marketing manager.

innocent_drinks_facebook-1

Read the full article by Avinash Kaushik “How To Suck At Social Media: An Indispensable Guide For Businesses” (here)

How Big Data Can Help Your Business Thrive

Big Data Matters

If you truly want to make an impact on your company’s bottom line, you need to know what type of people are interested in it. Being privy to this information will allow you to preempt their needs and meet them head-on through strategic targeting.

One example of this exists in the gaming industry, where effectively marketing their product towards those customers who would be most interested in their product. An unfocused marketing campaign that targets a very general audience would be ineffective, and can cost a company thousands in lost marketing dollars.

So where do they get this information? Information aggregation services employ analytics experts, or data scientists, who interpret customer behavior from reams of raw data. With this information, changes can be made with the aim of maximizing revenue. In one case, a game manufacturer was able to double its revenue to over $100 million dollars through simple tweaks to game design that targeted common customer characteristics.

The important thing is to pay attention to your customers and make the appropriate changes, and that’s what makes “big data” so exciting: it can be extremely lucrative, regardless of your specific business niche.

The Growth of Big Data

With the explosive growth of social media and the Internet in general, marketers began to realize the power of harnessing both to increase brand awareness. Later, they discovered that they could learn a lot about their customers’ spending habits and interests by monitoring their online activities.

However, with over 9,000 tweets sent per second, it can seem impractical to dedicate time to understanding and interpreting customer behavior through such a vast amount of data. Even Google had attempted the enormous feat of indexing tweets back in 2011, but ultimately failed.

Even worse, some financial officers may be cross to budget for social media departments due to the department’s inability to provide a tangible ROI. In fact, many social media departments are shut down entirely due to not having set goals. If the department can’t prove that it’s making a difference in returns, it doesn’t have a chance of survival.

And that, sadly, is where many companies get it wrong. You can’t simply jump on the social media bandwagon and specifically assign a team to do just that. Rather, an integrated approach that utilizes all facets of big data would effectively cover all of your bases and provide you the valuable insight to make informed decisions.

Psychographics Fill in the Gaps

Where demographics cover the basic physical traits of a customer base, psychographics go one step further by observing customer behavior. In essence, it takes into consideration the customer’s social identity and modifying marketing efforts to meet that identity. Where demographics can be lifted from readily available tools, psychographics are not.

The basic goals of psychographics are to retrieve customer insight by:

  • Getting to know them
  • Observing their behavior.
  • Asking questions.

As the previously mentioned game manufacturer clearly displayed, customer behaviors were observed, studied and met with relevant changes to game design that netted double their normal revenue.

Even better, the natural steps that come from studying psychographics also generate brand loyalty. When a company takes proactive steps towards connecting with their customer, the latter will feel more valued and will likely recommend the business to their friends and family.

Word-of-mouth recommendations are also very powerful at creating brand awareness and helps companies avoid the old school and inefficient method of “cold calling” potential customers.

Examining and acting upon what motivates your customers will generate more accurate leads than simply pandering to what’s shown in a demographics spreadsheet. Just because your customers share the same age group or income level doesn’t mean that they have the same interests.

Instead, find out what motivates them and where they interact most.

Examples of Big Data in Action

Where using big data can help a company effectively connect with their customers, it can also be used in other areas, such as company expansion. For example, Wendy’s recently utilized a GIS service called Esri to help them determine where to build new stores. When ran, the system gives planners demographic information on nearby residents and sales records, mostly pulled from public records.

After the economic downturn of the economy in 2008, many companies have turned to services like Esri to reduce the risk that comes with a serious investment like expansion. However, it has also been used in more customer-centric approaches as well, like with Ascena Retail Group, Inc., which owns brands Maurice’s, Dress Barn & Justice. All three of these brands cater to three distinct audiences, and through the use of big data, Ascena Retail was able to stratify all three brands and effectively plan for their integration based on socioeconomic information.

Regardless of your application, big data can help you significantly reduce your risk and help you make informed decisions in regards to marketing and planning. The chances of a return are much greater if you make a genuine connection with your customers, and part of that is fulfilling a need before any of them knew they had one.

This excerpt is from the Innovation Excellence. To view the whole article click here.

Taking a Mid-Career Plunge Into Digital Marketing and Analytics

I am presently in a “career-transition adventure”, making friends, learning about companies, and making decisions that may determine my trajectory for the rest of my life. I’m in good company, as about eight-million fellow Americans are presently doing the same thing. (Hey guys!)

A bit about me …

I’m a husband, father of four, manager, and all-around fixer.

I’m creative, curious, and future-focused with a bias for action. My passion for making things is manifest through many hobbies including gardening, cooking, maintaining a small fleet of aging Toyotas, and conducting small to massive DIY projects around the house.

Professionally, I love pioneering new arenas, building new operations, and developing talents in the people who run them. I believe in doing a good job, having fun while working hard, and that all business is personal.

I’ve worked 25 years in graphic communications, design, and digital production. I have a B.S. in Operations Management from the University of Memphis, an M.B.A. in Finance from the University of North Texas, and have recently concluded a 17-year career with the world’s largest integrated communications company, RR Donnelley.

Time for a change

For the past 9 years I led a large team on-site at RadioShack’s headquarters in Fort Worth, Texas. My group produced nearly all print-marketing communications programs including circular, in-store POP, direct mail and packaging, with services including creative development, copywriting, photography, photo-illustration and retouch, desktop production, digital asset management, technology-based services and business process consulting. RadioShack’s bankruptcy resulted in the discharge of all vendor contracts, and I was obliged to dissolve the business.

I am now in transition, and taking the opportunity to upgrade my skills. However, it’s been challenging to decide where to invest my time. This is a chance to re-tool and choose a trajectory for (potentially) the rest of my working life, and I want to make sure it is in a field that is growing, stimulating, and populated with smart, creative people.

Discovering digital marketing and analytics

Over the last couple of months I’ve parsed hundreds of job postings, and have seen substantial demand for Digital Marketing and Analytics.  Nine years in traditional marketing has provided some peripheral exposure to the field, which has grown and evolved during that time, and recent study on the subject has been a real eye-opener. I’ve decided to dive in and add digital marketing to my portfolio of skills and experience.

Why digital marketing and analytics?

This article indicates that 71% of companies have gaps in their digital marketing teams, with the biggest gap being in analytics.

digital_marketing_infographic

All indicators are that digital marketing will continue to displace traditional marketing, especially as digitally-integrated millennials enter the workforce and wield their effect as a consumer powerhouse. This will continue to increase the pressure on companies that are already struggling to find capable staff. Unlike petrochemical engineering, which was recently touted as one of the hottest career tracks in the country (and later tanked as oil prices dropped), digital marketing and analytics isn’t closely tied to the fate of any specific commodity. With all indicators pointed toward growth in demand and a shortage of talent, it looks like a great bet for people with a bent toward marketing, technology, and data.

My education in operations management and finance was heavy in decision science, information systems and statistical analysis. Additionally, my work in premedia has been highly focused on information technology and the development of expert systems used to manage marcom information flows. Digital marketing and analytics is a natural extension of my education and experience, and I intend to immerse myself in the subject over the next several weeks.

Fortunately the internet is awash with free and inexpensive resources to acquire proficiency in the craft. Google doing their part to fill the gap by hosting free training programs through their Analytics Academy, and I have already begun work toward a certificate in Digital Marketing and Analytics through the University of Illinois Urbana-Campaign and Coursera.

Why the blog?

I’ve set up this site to share thoughts on the overlapping roles of art, science and craft in the business of communications and marketing, to share discoveries (as well as the odd side-interest), and connect with others doing the same thing.

Please feel free to comment below with your perspective, advice, and questions.

In the mean time, best wishes and have a great Labor Day weekend!