Got data? Great, but now what? Catherine Vallence asks how marketers can extract insight out of information, how to decide on suppliers, and how, if done right, the CMO can be the company’s greatest hero.

 

It’s 2009 and the CMO is about to deliver a conference speech on his organisation’s new brand campaign and its plans to drive customer acquisition through TV, radio, print and digital. In the same week, she receives a CEO request to update the board on how the investment is tracking and how to drive the business further based on trends and market sentiment. To say the CMO feels underprepared for the task is an understatement. Fast forward to 2013 and we’re now four years into the real use of social platforms and the importance of mobile is growing at a rapid pace. The CMO and her team have just had their weekly catch up with their counterparts in IT, and the customer intelligence from the business’ digital and traditional channels has offered sparkling clarity for the CMO’s next brief to the board.

This time our CMO is armed with enviable insights on how the returns on investment are tracking in all channels, what ROI is expected three quarters out and what the business opportunities are, based on market trends.

For this organisation the relationship between IT and marketing has never been better: customers are increasingly seeing the organisation’s marketing materials as useful content, the board is welcoming favourable earnings results and the CMO has embraced this as an incredible time of opportunity to do more with less.

 

Analysis paralysis

According to a number of local industry figures, the shift to data-driven marketing is revolutionising the marketing sector more than anything before, and it is quickly becoming a new standard.

While many marketers may be sceptical about what has simplistically and collectively been called ‘big data,’ and perhaps been overwhelmed by it, many in the industry say it heralds a fantastic time for marketers.

Graham Kittle, partner at IBM Australia and New Zealand Global Business Services and leader of its strategy and transformation practice, says data-driven marketing is changing the landscape so quickly that one-directional campaigns are losing their lustre.

“As marketers shift from above the line marketing to below the line targeting, we’re seeing the end of the average customer and focusing on the individual with targeted offers instead. Right now the opportunity is really terrific to put data-driven marketing solutions in place where the conversion rates are high.”

He says there’s a tremendous opportunity for astute marketers, but, “unfortunately some marketers are still going to conferences and talking about brand and how to develop a customer strategy and know the customer.”

The new era, says Kittle, is all about the relationship with the customer – that is why it is redundant for universities to still be teaching students about the four Ps, he believes. Analytical tools mean marketers can make informed decisions about their spend.

Despite data evangelists singing the praises of advanced analytics and marketing intelligence engines, there are many CMOs and marketing decision-makers who are unsure of how to gain value from it – and that indecision is compounded by the significant investments required in technology systems.

Aden Forrest, managing director of Marketo Australia and New Zealand, says for marketers to reap the rewards they need to consolidate their digital and traditional channels. “If marketers manage that, the paybacks are phenomenal.

“There’s no question that the sheer volume of data coming through offers much opportunity, but just because you have more data doesn’t mean you’re going to do something with it.”

Forrest says being able to listen is vitally important, and then taking that insight and systematically scaling it across multiple channels and multiple organisations is what wil make the difference between ‘good’ and ‘exceptional’ in the coming years in the Australian marketplace.

Martyn Riddle, managing director of software provider OpenText, agrees, and says often people get obsessed with the data and then try to find an activity they can leverage data from. “Instead, they should be using this data to target their demographic with the correct offer because big data means it’s no longer a shotgun approach but an extremely focused target.”

As one of the world’s leading players in cloudbased customer relationship management (CRM), Salesforce is now tapping in to the real-time ‘voice of the customer’ by locating conversations about an organisation’s products, services, brand, industry and competitors. Area vice-president, Asia Pacific and Japan, Charlie Wood, says that’s not only useful as a feedback mechanism, but also to trigger real-time marketing events. “It has turned search engine optimisation (SEO) and search engine marketing(SEM) on its head. It means you can go and find the people who are talking the language of your customers.”

Wood says big consumer brands such as airlines, telecommunications companies and banks in Australia are doing fantastic things in this space and refers to a telco example around smartphone conversations. “Data from people looking for advice on the latest Samsung or iPhone is a good opportunity, because it’s likely somebody is at the end of a contract and looking to go on a new plan, so it’s an ideal time to get a marketing message to them about your offers or promotions,” he says.

Some financial services brands have embraced the use of data-driven marketing by harnessing the power of influential bloggers. Woods adds that, in the past, companies invested large amounts into SEO to lead consumers to web properties and pages, but now the opportunity is in creating real-time leads. “Flip that around and go and find people talking the language of your buyers on a one-to-one basis,” he says.

 

Tackling the challenge

Despite these advances, many organisations still grapple with how to capture, sort and analyse data to generate insights on their customers’ behaviours.

But where businesses struggle with evolving landscapes, service providers inevitably evolve to meet their pain points. Marketing communications group STW Group saw a gap and recently launched new data and analytics agency, data@Ogilvy, headed by Leon Bombotas, to offer clients help on how to make sense of their data.

Bombotas says the greater a marketer’s aptitude with data and digital, the greater the chance they will identify and execute successful marketing programs. He offers three key tips to marketers trying to find their footing:

• optimise existing marketing programs,
• improve the organisation’s value proposition, its processes such as multi-channel capabilities, and align organisational structure to deliver against commercial KPIs, and
• through ‘disruption’, or by using captured data, enter into new markets.

 

Bombotas points out that, although increasingly more critical to marketing, manipulating data isn’t entirely new to most mature businesses. “The difference we’re now witnessing is that in a digital age, entrepreneurial marketers are more inclined to seek out opportunities to mine, utilise and deploy the data,” he says.

For different companies, how that manifests will differ accordingly. Asia Pacific presidents at Responsys, Paul Cross, says this is because every company has a different way of competing in the marketplace.

The marketing automation provider uses two key categories of data: interaction and preference data. Interaction data indicates intent, and looks at, for example, the products people are interested in or how frequently they are visiting stores or websites. It drives relevance and higher conversion rates and can be sifted through to use for individualised cross-channel marketing programs.

Preference data across channels is about giving customers a voice on what information they’re interested in, how they want to be communicated to and through which channels. This can minimise the risk of sending out unwanted messages.

“The challenge for marketers is to think of individualised programs and how data can drive them,” says Cross. “It needs a fresh approach to how they think about their budgeting, their internal systems, their teamwork and their approval methods so they can begin to execute individual interactions at a massive scale rather than taking single communications out at a massive scale,” he says.

Managing director at Adobe, Paul Robson, says in the past a business may have had data coming from its website, social media sites, CRM tools, different internal applications or technologies and even thirdparty data, from providers such as Nielsen for some types of advertising.

“Now you can aggregate offline and online data across one analytics platform and get a useable reporting document or dashboard that covers all of that data analysis, and that is powerful. Big data is one thing, but the ability to analyse that data and make decisions on that data is the key,” he says.

 

Choose your friends wisely

Robson’s advice for choosing partners for a business’ digital needs is to have a clear, coherent, top-down digital transformation story that involves marketing and IT and avoids band-aid solutions.

Forrest goes further, and says when an organisation is looking at bringing on an agency, it needs detailed knowledge on how that organisation’s customers consume content and data, as well as the end-to-end customer experience. “When making a purchase, a business needs to ensure it has a system that can capture and track prospects along the sales cycle, create a lead score and pass marketing-qualified leads to the sales team.

“Obviously it needs to be done in an integrated way, so sales and marketing follow the same processes and see the same data,” he says. A band-aid approach can be problematic to integrate and potentially present conflicting data back to the market. At an enterprise level, Forrest recommends providers with industry standards, that are not going to be too niche and have gone through the heavy lifting, and if playing in the cloud-based space, providers that ensure their offerings are certified to the right levels and independent audit requirements.

“In the mid-market or SMB space, it’s not so much of an issue because these organisations are dynamic and focused on how they can grow their businesses. They want the best offering to deliver the best services to their customers,” he says.

“Over the past five years cloud technologies have transformed the way mid-market and SMBs can compete with the largest, most recognised brands, because ultimately they are engaging at a level that, traditionally, they couldn’t afford.”

 

Footing the bill

Industry estimates put the typical proportion of marketing budget spent on data-driven systems at anywhere from five to 20%, with that level rising for certain categories like ecommerce, banking and telcos.

With this proportion widely believed to be on track to double in the next five years, is this trend starting to draw spend away from other departments?

Industry analyst Gartner estimates that CMOs will outspend CIOs on technology by 2017. It’s an oftquoted stat, but one that Richard McLaren, managing director of data and services at Mi9, disputes.

“It’s a great attention grabber but, to be honest, if CMOs are standing up technology infrastructure then that suggests an organisational dysfunction more than anything else.

“What it’s really talking about is where businesses will invest capital in information technology overall and l think that will still live with the CIO. But the capital is really on understanding consumer behaviour and marketing effectiveness as opposed to 20 years ago when it was about transactions and that world has passed us by. The technology functions of CIOs are always accountable to internal clients,” he says.

Riddle is of the same opinion: that accountability of all systems and applications should reside with IT to ensure they are operated correctly across the organisation, but the CMO is an important customer of the CIO and is starting to make more demands on what can be achieved.

Bombotas, on the other hand, suggests the relationship between marketing and IT works best when there is minimal reliance on the latter.

“CRM and customer data platforms form part of the core business value proposition because they exist to drive sales, retain customers and improve margins, and these are issues at the heart of marketing functions.

“To be useful, these platforms also require senseand-response times in a rapid time-frame, beyond the usual development cycle of even the most agile IT teams. For instance, test and learn programs can be turned around faster when devised, designed, executed and measured by the campaign team with minimal dependency on IT,” he adds.

While the headlines continue about evolving relationships and tensions between departments, it’s undeniable that the marketing sector has changed dramatically since 2009. For marketers struggling with indecision, it’s perhaps sage advice to do anything, rather than nothing. Forrest concludes by saying that many organisations struggle with how to introduce data in their day-to-day marketing, and his advice is to just start.

“Complacency and ‘paralysis through analysis’ can stifle a lot of growth. If you consolidate your digital channels and traditional channels, you’ll find huge efficiencies that will allow you to speak more concisely and engage better with your customers.

“It’s a fantastic time for marketers to do more with less.”