What Does it Mean for Marketing?
If you’re into technology and online marketing, then you’ve definitely heard of the big data concept. It’s everywhere. Since it’s so prevalent in online marketing guides, you might assume that it’s absolutely necessary to infuse your strategy with big data analytics. Is it? Some would disagree.
When Wired published the article Big Data, Big Hype, it attracted tons of attention. It was not a revolutionary idea; it was just another one in the long line of articles discussing the problems. Are all these efforts worthless? “Big Data is not to blame – the truth is, it is just a lot of data. Bad analysis is bad analysis, and there are many examples where good analysis combined with large volumes of information have been used to gain good insight.”
Okay; that’s confusing.
There’s a lot of hype around it, but is it nothing but hype or is it justified?
We’ll try to shed some new light on the issue. Let’s take the current state of big data and try to predict where the truth will take us.
How The Hype Started
Data has always been part of marketing efforts. Ever since the beginnings of corporate branding, companies have been using it to develop strategies that would affect the buying decisions of their target audience. In 1901, James Walter Thompson published The Thompson Blue and Red Books of Advertising. Here, he identified the need for trademark advertising, which would be the same thing as branding in today’s marketing slang.
It didn’t take long before business owners and marketing experts realised that putting a logo on a product was not enough. Companies started using people in their ads, so they would give the brand personality – something for the user to identify with.
These companies did not simply come up with commercials on a whim. They were looking for something that would work with their target audience. They used data to identify what worked and what didn’t work. Most of that data was collected through observations of the target audience behaviour.
Once the Internet made it possible for brands to track that behaviour online, everything changed. We got the chance to track and store massive volumes of data. Marketing experts started seeing big data as “the next frontier for innovation, competition, and productivity.” They predicted that “it would become a key basis of competition. This would underpin new waves of productivity growth, innovation, and consumer surplus – as long as the right policies and enablers were in place.”
So the big data hype was on its way.
Today it is integrated in all aspects of business processes. If you take a look at the product development process, you’ll notice analytics are present in every single stage.
So today’s companies are doing what companies have always been doing: using data to make informed decisions and develop efficient business strategies.
The difference, however, is in the volume of data that’s available to collect and analyse today. That’s where the problem begins.
The Current State of the Hype Situation
Gartner Hype Cycles focus on presenting the maturity and adoption of technologies, as well as their relevance to solving actual business problems. The Gartner Hype Cycle for Emerging Technologies 2018 identified five key trends as “the next most impactful technologies that have the potential to disrupt your business, and must be actively monitored by your executive teams:”
- Democratized Artificial Intelligence (AI)
- Digitalized Ecosystems
- Do-It-Yourself Biohacking
- Transparently Immersive Experiences
- Ubiquitous Infrastructure
Although this report doesn’t directly identify as a trend, you can see big data written all over it. Here are a few excerpts from the report to clarify the current state:
- “On the home front, connected homes will interlink devices, sensors, tools and platforms that learn from how humans use their house. Increasingly intelligent systems allow for contextualized and personalized experiences.”
- “Blockchain could be a game changer for data security leaders, as it has the potential to increase resilience, credibility, transparency, and trust in centralized systems.”
- “While early adopters [of AI] will benefit from continued evolution of the technology, the notable change will be its availability to the masses. These technologies also foster a maker community of developers, data scientists and AI architects, and inspire them to create new and compelling solutions based on AI.”
All current technological trends appear to revolve around big data, and that’s all part of digital marketing. Marketing experts analyse data to identify the behaviour of their target audience, so they can suggest the development of better products and more relevant promotion of current and upcoming offers.
What’s the Problem?
We’ll have to blame the Internet. The connected world makes tons of data available for those who want to analyse it. All kinds of devices are serving more by the second: smartphones, tablets, security systems, smart watches, and even domestic appliances such air conditioners, refrigerators, ovens, and vacuum cleaners. Let’s not forget smart door locks!
Let’s take Samsung as a specific brand that’s using big data to monitor and analyse the behaviour of its users. The company announced that it would introduce AI to all its devices by 2020. Machine learning, which is based on analysing big data, is an inseparable aspect of artificial intelligence. With this strategy, Samsung is aiming to get ready for the fourth industrial revolution based on AI, big data, and robotics.
The connected home trend offers huge benefits to consumers and brands, but it also makes the issue more complex than ever. To be precise, these are the major issues related to this concept:
We all want to contribute towards better products, services, and applications. But will we do that at the risk to our privacy? We know that with each smart device we use, we’re sharing information about our behaviour. But who has access to that information? Do we have control over the information we want and we don’t want to share? How much of it is actually being used? How much do these companies know about us?
The European Union made important changes with the General Data Protection Regulation. Some of the key changes involve strengthened conditions for consent. The request for consent must be delivered to the user in an intelligible and easily accessible form. The user must have the right to access all data obtained from them and they also have the right for it to be deleted. As it turns out, companies and marketers are facing far stricter regulations on how to handle it.
- Too much noise and inconsistent credibility
Analysts are facing excessive volumes of information to analyse. It’s getting hard for them to measure the right variables, simply because it’s hard to detect the right signal in all that noise.
Not only is it big, but it’s also inaccurate in some aspects. According to Experian’s The Impact of Bad Contact Data Quality report, 23% of businesses believe they have incorrect customer or prospect data. Some of the most commonly reported data errors were missing or incomplete data, outdated information, and duplicate data.
Businesses are aware that data mistakes occur, but they have difficulties to predict where and when the next issue will occur.
Lack of Experts
The same report we just mentioned identified lack of knowledge/skills and lack of human resources/employees as the two major internal challenges to improving data quality. An average marketing expert does not have enough knowledge and skills to analyse big data. Businesses are facing the need to invest in more training for their current workers or recruit data experts, which are not easy to find.
Is It Just Hype or Does It Actually Matter?
Big data is constantly evolving. The hype around it, however, seems to be slowing down. Some experts will argue that it is too complex to analyse and the potential for error is too big and so it cannot be taken as a reliable source of sound decision marketing.
The fact is that the era of big data is nowhere near its end. We’re seeing more smart devices by the day, and they keep generating more data.
As for the challenges about privacy, credibility, and expertise, big data service providers are aiming to solve that problem. They make it easier for businesses to understand it and work with them on the way to improve products and make marketing more effective.
It’s not just hype.
We’re looking at a huge potential that can be exploited. Sure; there’s much more work to do in this niche and there are serious issues to overcome. Businesses, marketers and IT experts have to join forces in order to develop more efficient ways of analysing and using big data.
The hype is here to stay, and you better believe that it’s for a good reason. What you also need to consider though is do you have a strategy for dealing with big data? Have you allowed for the growth by training and recruiting people with the right skill sets? Finally, have your invested in the right tools to exploit big data?