The Answer is in the Data

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Nov 2, 2011

The difficult economy is putting more pressure on marketers, challenging them to prove that the dollars they spend are delivering the best results possible. In this digital age where the volume of accessible data is increasing daily, marketers and advertisers are quickly becoming interested in the role data can play in developing marketing strategies and advertising campaigns that drive brand awareness and ultimately sales.

Even with abundant consumer and business data available today, the challenge that marketers face is to find high quality data and organize it in a way that logically drives and determines marketing actions. The old marketing paradigm was rooted in maximizing marketing spend by communicating with the largest audience at the lowest cost. Cheap e-mail blasts are the modern equivalent of this outdated strategy. The new marketing paradigm is one that leverages data to create highly targeted cross-media campaigns directed at a segmented audience with a specific message. Effectively segmenting these audiences and building marketing models that yield the strongest return on investment, however, is easier said than done.

Building solutions that accurately enable marketers or service providers to mine, analyze, model, and optimize data in a sophisticated manner requires a more advanced understanding of the science and math behind data analytics. To this extent, software companies have begun stepping up to the challenge and are positioning themselves to support the growing need for in-depth customer intelligence and more precise measurement and monitoring of marketing campaigns.

Three companies have been leading the effort to move data analytics forward:

Portrait Software, part of Pitney Bowes Business Insight, explores predictive analytics and segmentation through uplift modeling (PBBI published a whitepaper on the topic).  Through this technique, customers are divided into four profile categories. The assigned customer profile determines whether or not it’s worth marketing to the individual. The profiles and an example of who would bring the most value from receiving a catalog are as follows:

  • Sure thing: Wasted marketing, they were going to buy anyways.
  • Sleeping dog: Sending a catalog deterred a purchase.
  • Persuadable: Sending a catalog triggered a purchase.
  • Lost cause: Not buying either way.

Those who are considered “persuadable” are the customers worth targeting.

KXEN, which stands for Knowledge Extraction Engine, is another example of predictive analytics software. Its primary software solution, InfiniteInsight, provides awareness of actions throughtout a customer’s lifecycle. The soluiton enables marketers to build models based on data and make changes based on campaign response, to improve predictions over time. Some customers are using the analytics from KXEN to conduct social network analysis, drive recommendation engines, and manage risk reduction.

IBM offers a variety of data and analytics tools, a result of its multi-billion dollar acquisition spree of data-related companies over the past few years. With Coremetrics, IBM primarily targets digital marketers through the use of Web analytics and social media measurement, while also offering solutions that take into account offline activities that spur digital interactions. In addition, IBM’s Unica acquisition added enterprise campaign management into the fold, while Cognos provides capabilities for mining large data sets and performing complex predictive data modeling for a variety of applications, including marketing.

By identifying what category of individual to target, marketers can focus their marketing spend on the demographic with the highest propensity to make a purchase. While tools will help, there are still methods and processes that assist marketers in achieving the best results. To help bring clarity to this topic, the Henry Stewart Group, which has established its presence within our industry through its Digital Asset Management (DAM) events, has created the Marketing Analytics conference. For the second year, this event will be hosted at the John Hancock Conference Center in Boston, Massachusetts.

My colleague Matt Swain and I had the honor of attending last year’s inaugural conference (see our blog from last year). This year, InfoTrends is proud to be a media partner to help get the message out that data analytics is not some trendy buzzword, but instead it’s a core function of marketing.

As marketers continue to search for solutions that bring a sizable return on their marketing investment and improve their overall marketing effectiveness, one thing is clear; the answer lies somewhere in the data, and analytics is the way to help find it.

P.S. If you do plan on attending, mention the promotional code MABoston100 when registering to receive $100 off.

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