Outlook 2006: Database Marketing Needs A Seat at the Executive Table

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For far too long, marketing has been positioned as a qualitative, right-brain discipline driven largely by creative and entrenched in emotion. This idea was raised during a conversation I had recently with an executive from a major advertising firm. The executive, by his own description, was a "big-idea" man, always searching for the next big thing for an ad campaign that would propel his clients' marketing results to new levels. Like many ad professionals, he largely dismissed database marketing because it wasn't a big-idea business.


Many corporate executives also buy into this belief. They're still committed to the idea that marketing is an emotional practice and not a rational, fact-based one. Marketing in the future will be rooted firmly in both. Fortunately for database marketers, a revolution is occurring that will make the big-idea people take notice. Though several factors are igniting this revolution, four stand out.


One is accountability: the demand from C-level executives to make marketing more accountable for its effect on an organization's bottom line. The desire for more accountability in marketing will grow, and all marketers - including database marketers - will be held accountable for their efforts. Database marketing provides the metrics that demonstrate the value of every campaign.


The second factor is customer management strategy. Companies across several industries, including consumer packaged goods and financial services, are shifting from product-centric approaches to customer-centric strategies that manage the entire customer relationship. Database marketing allows greater audience segmentation and measurement of customer value, which are two drivers of this trend.


The next factor is media fragmentation. As marketing communications become increasingly targetable, addressable and measurable, companies are relying less on mass media channels and redirecting marketing dollars to more measurable, targeted forms of media. This increases the complexity of media measurement and optimization. By enabling both measurable and targeted communications, database marketing will play an increasingly critical role within marketing programs.


The fourth factor is technology. Advancements in the way we can use data - that is, how to leverage knowledge to achieve results - are making the answer easier to know. And as that answer becomes easier to know, more marketers will demand to know it. Many marketers will be surprised by the answer because they will learn that they've been wasting time on the wrong approach. Moreover, they will find that they lack an overall framework and understanding by which they can benchmark their approach and learn from their experiences.


Though upcoming trends are important, the core issue as it relates to information-based quantitative marketing continues to be a matter of what's "knowable" versus what's "doable." That's because many marketers tend to work on what they know. Generally, the things they know today are not the things that will create the biggest impact in the marketplace.


Database Marketing, Not Management


Marketers also think that they're doing "good" database marketing. Though there's a lot of talk about good database marketing and the use of data in the enterprise, the proper use of information remains a highly underutilized asset. Many marketers consider themselves decent database marketers, but they don't judge their performance against the right metrics.


The challenge is for the fact-driven, rational marketer to become more relevant to the C-level suite that signed on to the big-idea belief. Database marketers are noticeably absent at the strategic table; instead, they have a seat at the operations table. And if you look inside many database marketing departments, you'll find that most organizations have little or no expertise in analytics, marketing strategy, business intelligence and little true authority. Mostly, database marketing is being misinterpreted as database management.


Some marketers are beginning to understand the value of quantitative, information-based marketing. But in the holistic view of things, despite the advances in technology and the growth of quantitative competencies over the past several years, the potential of database marketing remains largely untapped. As with the ad executive, there is always the tendency to jump to the next "big idea" that will get noticed. The current focus in most database marketing departments is on technology and improving operational efficiencies. The problem is that database marketing has never been "the next big thing," which makes it a less intriguing option.


Strategy Over Vision


Firms that continue to believe the illusion that marketing is a wholly emotional undertaking must begin to conceptualize new quantitative, data-driven approaches. Too often, the industry is rooted in buzzwords that connote "vision" - customer-centricity, accountability, one-to-one marketing.


Marketers must stop talking about their vision and start talking about strategy. Ask yourself whether you really have a strategy to reach that next step. Do you have a framework in which to understand how you're going to implement against that strategy? Do you have metrics that are being used by the C-level suite? Is your perspective broad enough to be relevant at the strategic table?


It's going to take time before marketing becomes more balanced and database marketing takes a seat at the executive table. The revolution won't happen in any given year, but rather will evolve gradually. This is a decade-long journey.


The next several years will bring great opportunities for both database marketing agencies and organizations that embrace quantitative, data-driven approaches. The basic elements to revolutionize marketing are already in place, and there exists a chance for first-mover advantage for those that possess the depth and breadth of competency on which to act.


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