By Jessica Bubenheim, on 07 February 2018
Top performing organizations make informed decisions by analysing data. Organizations require data driven decisions for various area of business insight some of which including, decision maker, marketer, strategy maker, and operation manager.
What does this mean?
The application of data is limited only by our imagination. Netflix’s Beautifully crafted content is the ideal case in point, known as the “Netflix Quantum Theory”. Have you ever wondered how you could possibley spend hours binge watching Netflix Originals when in reality you’ve got a million other things to do? Does it take an artistic genious to craft suich captivating content; generate the beautifully twisted plot of ‘House of Cards’ or the nostalgia of ‘Stranger Things’. ‘Narcos’, ‘Marvel's The Defenders’, ‘13 Reasons Why’, ‘Orange Is the New Black’ they are all cases of highly captivating – some may say addictive - content. And before we continue reminissing about the beauty of the content, what if I told you the success boils down to a science instead of an are - data. Netflix has created a user generated database of American cinematic preferences, more commonly reffered to as the ‘window to the american soul’. Netflix is no longer guessing at success- they are modelling it.
Large banks of consumer data did not necessarily tell them how to make content, but it did indicate what content would captivates the heart and soul of their rougly 120 million streaming subscribers worldwide.
Why does it matter?
Seeing such opportunities for taking advantage of customer data, we start to question: will marketers evolve? or are data scientists taking over? One thing is clear advertising is not what it used to be. In 2012, the annual report of WPP a world leader in advertising and marketing services noted, “We are applying more and more technology to our business, along with big data. We are now Math Men as well as Mad Men (and Women). Thus, we go head-to-head not only with advertising and market research groups such as Omnicom, IPG, Publicis, Dentsu, Havas, Nielsen, Ipsos, and GfK, but also new technology companies—such as Google, Facebook, Twitter, Apple and Amazon—and then with technology consulting companies such as Infosys, Wipro, Accenture and Deloitte.”
The Bigger Picture
Is the ‘art of marketing’ then really a science? Increasingly we see investments in digital communications, programmatic media planning and buying, and data by leading agencies. Without a numerical approach, marketers may just get left behind. Lawrence P. Summers sums it up well, “Data may be to the 21st century economy what oil was to the 20th, a hugely valuable asset essential to economic life….”. Data is what drives the internet. The internet has been growing at 20 percent whilst economic growth is somewhere around 4 percent annually. For a competitive edge – we need competitive high quality data in our decision making processes. MIT constructed a graph illustrated the power of data in decision making.
source: MIT Sloan Management Review
2016 studies by Johnson found one third of all marketing spending in the United States (roughly $260 billion), is spent on services related to personal consumer data. Taking Google as a picturebook example- their customer relations have gotten so intimate that Google evolved into both the medium and the marketplace, the targeter and messneger. They key benefit to an ‘integrated google approach’ is that it keeps the firm immune to hold-ups of content, information, and data exchanges in the case that net-neutrality rules were to end. Net neutrality meaning: impartiality
The Future of Marketing and Advertising
So in the past advertising agencies played the key role in adressing the communications problem client firms marketeres. Meanwhile IT professionals role was taking care of information technology problems facing clients. The key difference from then to now- the importance of customer data in our marketing strategy. As marketing problems increasingly require IT solutions the professions are converging. Data and technology sit embedded in 21st century marketing. To survive in the data driven economy it’s vital to be able to work in a data rich environment. The professional values that dominate?
Read our 10 skills of a successful CMO.