Thursday, November 17, 2011

Marketing by the Numbers

One of the side-effects of our always online existence is that everything has become visible and measurable. As we all rummage around in the virtual world, we leave behind a trail of digital detritus that others can find, accumulate and sequence: What we do, where we go, who we are and what we think can all be discovered and refactored with unnerving ease. This has raised many alarms about privacy and security, but has also introduced opportunities for marketing professionals.

I’d argue that the new world of digital marketing is upending the whole marketing profession.

Marketing used to be a largely subjective, qualitative, artful enterprise. For sure, we could do research, conduct elaborate focus groups, and painstakingly gather data to inform decisions and discover the impact of our marketing activities, but all this was arduous and often ad-hoc. We’ve moved from an environment of information sparcity to information overload. Instead of ‘mining’ for data, we’re dealing with the avalanche.

Today, data-driven marketing is becoming the norm. Expectations of what marketing can achieve are changing. Most important, there’s a new level of expected accountability.

Some years back I got a Ph.D. and as a result accumulated more knowledge about statistics and research methods that I thought was healthy, or useful. Turns out, my old stats texts are the books I’m referring to most. I’ve been interviewing for a new job and a common ground for questioning is “how do you measure the effectiveness of what you do?” I’ve even seen job descriptions that single out the ability to conduct A/B and multivariate analysis of campaign data. Being able to read data – and to conduct marketing from a data-driven perspective – is a vital skill today.

Of course, data isn’t wisdom, as Wharton Professor George Day has pointed out. According to him, the amount of data a company faces is doubling every 18 months, while our ability to sift and assimilate the data is remaining pretty much static. Day and his colleagues advocate ‘adaptive marketing experimentation’, an approach to marketing that fosters data-driven decision-making by continually testing variations on different solutions – a fail-fast, discover-quickly methodology. Their views are informed by a recent IBM research report created from interviews with over 1,700 CMOs. The leading issues for these CMOs: data overload, social media, channel proliferation and shifting demographics.

Professor Day’s recent article is a great read. And after you’ve finished, see if you can find those old statistics textbooks in the attic.

2 comments:

Justin Souter said...

Ian - thanks for the link to this post when you commented on my site!

The George Day report looks promising, if a bit of a 'dense' read ;-)

I'm intrigued by the movie 'Moneyball' - aka the use of stats to make a difference on organisational performance. Hope to watch it in the coming week :-)

Ian Bruce said...

Thanks Justin. Day's report is a bit dense, but the ideas are solid.