"Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Dina Zelikson, senior marketing manager at Intuit.
Music often permeates conversation at work, and while remarking on the recent proliferation of niche genres with a colleague, we joked about the merits of the unlikely combination known as emo/screamo.
This got me thinking about how we expand our nomenclature to express nuance and thereby achieve more effective communication. The Inuit dialect of the Eskimo, for example, has at least 53 distinct words for snow, while the Sami of northern Scandinavia and Russia have a mind-boggling 1,000 words to describe the reindeer.
In our industry, the abundance is data. As with music subgenres, there is a data segment for everybody down to the most niche audience. Yet despite the profusion of distinct data segments, we remain largely ineffective in communicating the nuances of how we leverage that data.
Data-driven marketing is the nebulous catch-all phrase, but once we drill down, we find few effective terms in our linguistic quiver. In the end, your data-driven digital marketing strategy gets rolled up into categories like retargeting, behavioral targeting, programmatic or audience buys.
That isn't very useful if you are running a programmatic retargeting buy against an audience defined by user behavior on your site and your inventory is Facebook. Does that make it a social campaign?
I think dispelling the linguistic ambiguity surrounding discourse on big data and data-driven marketing matters because 1) there are still folks who think data-driven marketing is nothing more than hollow buzzwords, 2) the ambiguity in today's lexicon leads some to believe they are doing data-driven marketing when they are not and 3) since perception is reality, it determines the financial reality of the industry dollar flow.
Must Data-Driven Marketing Be Digital?
I was fortunate to have worked with some amazing data-driven thinkers, who happened to be direct marketers in the offline space. Given the rigor of testing and data-informed decisioning they've been doing for years, it would be hard to argue how data is not a big part of offline marketing. Except that when we talk about marketing that leverages big data, the assumption is that we are talking about digital. And in many ways we are and we should, where unlocking big data in mobile remains further down the road. Big data and data-driven marketing becomes inextricable from the technology that in a tiny sliver of time processes petabytes of data to enable automated marketing decisions at scale.
The intertwining of that kind of technology and data, however, does not mean that data-empowered offline marketing should be excluded from the great aurora of "data-driven marketing." Bridging the offline data gap, in fact, is arguably today’s biggest opportunity in technology enabled, data-driven marketing. I’d argue that multiscreen is the second.
So we arrive at an important caveat: Data-driven marketing does not inherently require a digital medium, but it is enabled by online data-processing technology where multiple data points are interconnected by virtue of data being liberated from file cabinets, Excel spreadsheets and siloed databases.
Data-Based Vs. Data-Driven Digital Marketing
Let’s examine some of the nascent instances of data-based digital marketing tactics: retargeting and third-party audience targeting. Both relied on cookie-enabled matching of user behavior to their online presence. Additionally, both were created on logic that if you see a group of people that expresses interest in your product or exhibits similar traits and behavior as your customer base or a competitor’s, then you should work to get in front of these folks. While this is data-based, it is not really data-driven.
These tactics relied on uncomfortably heavy generalizations, assumptions and one-dimensional strategies. There was no way to tell if users being reached were already your customers, unless they were at your site and possibly logged in or making a purchase – and even harder yet if you dealt with purely offline sales. When it came to third-party data targeting, audiences were, and still are, highly commoditized, where scale is reached via often shaky assumptions. Finally, the level of control in executing marketing strategy was restrictive and frequently isolated to the campaign, rather than a global advertiser level.
What puts digital strategy into the realm of data-driven is a multidimensional, automated decisioning model that is able to run an if-that-then-this logic query against interconnected sources of data, including first, second and third party. Adding a higher level of automation in the form of predictive and self-optimizing technology, coupled with integration across platforms, kicks it up another notch and into the programmatic arena. In my opinion, data-driven marketing inherently possesses a significantly higher level of customization or personalization than does data-enabled marketing.
The Promise Of Upper And Lower Funnel Tactics
I mentioned that clarity in the industry discourse on data-driven marketing will have an impact on the dollar flow. Investment in enterprise-level solutions and data-management platform integrations is setting the right course. There is also a positive, growing trend of data-driven advertising dollars being allocated to upper-funnel tactics. Lower-funnel investments are, of course, still compelling –now more than ever – because technology is enabling lower-funnel to fuel upper-funnel tactics in the form of brand advocates and predictive models.
These lower- and upper-funnel stages represent areas of opportunity, as well as reason for caution. As I discussed in my previous article, weakly constructed bottom-funnel tactics are a disservice to the industry, particularly if they get labeled as data-driven strategies. Also, as offline tactics are brought into the domain of programmatic and data-driven marketing, particularly TV, it is important to avoid complacently adopting legacy KPIs, such as the GRP, and calling them data-driven.
There isn’t yet one right answer, but we need to embrace the challenge and discuss our biggest opportunities. For instance, while mobile isn’t in danger of being dismissed from the industry discourse, offline marketing tactics – like direct mail – are.
So, without attempting to create a universal language, I encourage you to contribute your ideas about what you think data-driven marketing is or is not. Accounting for nuance is a big opportunity in itself, and a way to accelerate industry progress via more effective communication. Without it, we might have never experienced the joys of discussing the music genre of emo/screamo.