Big Data's Big Payoff: Bigger Conversion Rates
To marketers, data = dollars
Marketers, by and large, still have no firm ideas on what they're going to do about Big Data, but they know what they'd like Big Data to do for them: fatten their bottom lines.
More than 60% of members of the Direct Marketing Association surveyed have no stated strategy for integrating Big Data into their marketing efforts, according to a survey conducted by Neolane. But nearly the same portion (57%) of the 254 marketers who responded said they expected advanced data analytics to provide them with higher conversion rates. A third of them—the second highest response—said they desire better insight into customer behavior.
“We were a little surprised that more marketers didn't respond that customer insight was their priority. It appears that what they're saying is, ‘I know what my customers want; I don't need more insight. What I need is more data to do the campaigns better,” says Kristin Hambleton, VP at Neolane, a provider of marketing software focused on customer relationships. “The marketer's chief concern right now is how to get the data and how to store it and process it.”
More than a third of those surveyed said their databases grew by 11% or more in the past year, which may account for a lot of the data-processing paranoia. “More than 10% growth in database size in one year is quite significant. As a marketer myself, I can tell you, that's a lot to handle,” Hambleton says.
Asked to name the key challenges of dealing with increasing amounts of data, 70% of marketers said access, storage, and analysis. Only 28% said they were concerned with figuring out how the marketing department would employ the wealth of customer intelligence.
Interestingly, 40% of marketers reported that their departments were working together with IT departments to form better bonds with customers. Is it merely coincidence that same number of respondents said they had established Big Data strategies? Hambleton thinks not. “While we can't make that direct correlation, I can't help but think there's a connection,” she says. “Had we done this study a year or two ago, I think the numbers on IT and marketing working together would have been a lot smaller. Big Data has to be playing a role in driving this.”
It could also be driving a change in the makeup of the typical marketing department. Half of those surveyed said they changed the skill-sets in their offices—hiring a “data scientist,” for instance—to handle the influx of customer data.
A bigger impediment to full-blown application of Big Data is worry over complying with a new set of rules and regulations, such as escalating restrictions on privacy. More than half (56%) of respondents said they were “not very prepared” to deal with the issues of data governance.
“It's clear that our increasingly data-driven world is reshaping how marketers engage consumers. However, it's also clear that when it comes to the new rules and regulations of marketing data governance, most organizations simply are not prepared,” says DMA President and CEO Linda Woolley. “This shows how crucial it is that marketers understand best practices when it comes to data and information security.”
The DMA recently announced the formation of the Data Driven Marketing Institute, which works to increase understanding and improve perceptions of data-driven marketing among policymakers, consumers, and the media. It also introduced a certification course for data governance.