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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Finally got my R-Programming Certificate!

According to McKinsey Consulting, the US companies are facing an imminent shortage of analytical talent.

The United States alone faces a shortage of 140,000 to 190,000 people with analytical expertise and 1.5 million managers and analysts with the skills to understand and make decisions based on the analysis of big data.

Full Article: Big data: The next frontier for competition

Mckinsey _ analyst shortage

Looks like a call to serve and I’m game to “Do my bit”!  My chosen vocation, Digital Marketing is heavily driven by analytics to drive the development and refinement of campaigns. Therefore, I’ve recently enrolled in Johns Hopkins University’s excellent Data Analytics program (available via Coursera here).

Do Your Bit - Data Analytics

I’ve always had a fascination with tools that enable the tabulation and analysis of data, beginning with Excel, then Access and Filemaker Pro, and most recently R, which is an absolutely amazing, free, open-source tool for data analysis.

The JHU program includes an extremely challenging but excellent R Programming course, which I highly recommend. Though at times I felt like putting my head in a blender trying to figure out the programming assignments in the course, that is part of the education, and I was able to succeed by collaborating with peers in the course discussion boards and using online resources like StackOverflow.

I am very proud to have their R Programming certificate, and look forward to using R as a power-tool in my future career as a digital marketing analytics ninja.

R Programming_nickakrueger

For those of you wanting to do your bit and learn R, I also highly recommend the following resources for getting off the ground.

SWIRL

SWIRL (SoftWare Interactive R Learning) – This is a ridiculously awesome and amazing learning tool for R. You install R Studio (available here), install and load SWIRL, and off you go. SWIRL teaches you through interactive text-based lessons within the R console iteself, and feels more like a game than anything. The lessons fly by and are incredibly informative. I would work through them all once or twice before beginning the Johns Hopkins course, which will make the assignments much easier.

NewBoston

I also highly recommend working through Bucky Robert’s series of YouTube videos on R, hosted by The New Boston, a great, free, learning resource site. Bucky is great at explaining the basics in easy-to-understand terms, with a sense of humor to boot. I watched these while on the treadmill in the morning and found they really lubricated the learning process.

R for Marketing Research and Analytics

Lastly I recommend the book, “R for Marketing Research and Analytics” by Chapman and Feit, available on Amazon (here). Unlike the Johns Hopkins course, this book is focused on the use of R in a marketing context, with relevant exercises. My personal goal is to work through the entire text by 01/01/2016.

Ready to “Do your bit”? Good luck to you, and have fun!

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)

“There is no such thing as digital marketing. There is marketing — most of which happens to be digital.”

PepsiCo’s Brad Jakeman Suggests Shops Have Not Kept Pace With Change

Excerpts from Jakeman’s presentation at the Association of National Advertising’s annual “Masters of Marketing” conference in Orlando, Fla.

Brad Jakeman

“The agency model that I grew up with largely has not changed today,” he said, noting that he has been in the ad industry for 25 years. “Yet agency CEOs are sitting there watching retainers disappear … they are looking at clients being way more promiscuous with their agencies than they ever have.”

And he pointed out that big consumer packaged good companies still measure marketing spending as a percentage of net revenue. “That assumes that paid media is the only way to build brands,” he said. But that is wrong because content generated by others on a brand’s behalf, for instance, “doesn’t cost us a cent,” he added.

We are still talking about the 30-second TV spot. Seriously?
Mr. Jakeman called digital marketing the “most ridiculous term I’ve ever heard.” He added: “There is no such thing as digital marketing. There is marketing — most of which happens to be digital.” He urged marketers to create digital cultures, not digital departments. “We ‘ghettoize’ digital as though it’s the life raft tethered to the big ocean liner. And we have to move on from that.”

Excerpted from full article at Ad Age. Read at this link.