"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 Jason Kelly, CEO at Sociomantic.
Digital marketers look at data through a very narrow lens, but with great expectations for how it can impact their business.
The only data that seems to be of interest or value relates to their customers or prospects. The sheer volume of first- and third-party data that is collected, mined and analyzed is a testament to the role of audience data in digital marketing.
The goal, of course, is to understand the customer so well that a meaningful relationship can be established across devices, channels, time and touch points. If it were possible, marketers would love the opportunity to connect with their customers as individuals, to explain on a one-to-one basis how well a product or service would meet his or her needs. That isn’t possible, but digital marketing – when done well – can get brands pretty close.
Marketers today sift through huge volumes of data in search of the signals that will surface the people interested in buying their products. They depend on cookie-derived audience data to help them recognize the sweet overlap between customer intent and the product they sell. No one is going to argue that reaching people when they’re in market for a product or service is a bad idea. If digital marketing is only based on recognizing and responding to audience demand, however, we’ve got a problem.
Audience Data Is Just The First Step
Marketers have so many better and stronger signals than audience data. They have their own customer data that can be mined and applied much more effectively than it is today. Knowing how customers behave and extending that to audiences – as opposed to working from audiences back to customers – is a much more effective way to use data to drive demand.
Driving demand is only half the data story. The flip side of demand is supply, and most businesses have an excellent view of the products they sell. They know which ones are selling well, where they’re selling and to whom they’re selling. They also know which ones have the largest profit margins, which will be scarce due to supply-chain issues, and which need to be moved to make way for new inventory.
Digital marketers are often unaware of this information. Their world is a binary one of digital whack-a-mole. Find a woman between 24 and 35 years old with kids who likes to travel, lives in the suburbs and has a household income of more than $125,000. Once she is spotted, she is shown an ad. There’s nothing wrong with that approach, but things could be better.
Imagine knowing about that customer as an individual, rather than a member of an audience segment. As a company, you already do, but that knowledge is based on an entirely different set of data that isn’t often used in the marketing mix. This isn’t the anonymous audience data that resides in a marketing platform. It’s customer data sitting in a CRM system, a loyalty program database or a billing system.
That view of the customer might tell you she usually travels with one other adult, is a silver-level frequent flyer, takes three trips per year, has a customer lifetime value of X and has called an agent to check on fares to Italy. Having that kind of information would likely change the ads she is shown. Knowing what offers she responds to helps inform how you connect with other customers like her. But it doesn’t need to stop there.
Bring On The Data
Factoring in business data is a quantum leap forward. Knowing that selling seats to Milan in March is a priority might mean including it in creative or featuring it prominently in the mix of fares she is shown. The goal of selling those seats – coupled with her frequent flyer status and lifetime value as a customer – might lead to a discount being offered, one that can be measured for its ability to convert and adjusted on the fly to improve its performance.
Doing this requires working with three sets of data at once: what is known about an individual’s interest or intent, what is known about that person as customer and what is known about business goals or priorities. Merging these makes sense but it isn’t done regularly – at least not in the digital world. Offline marketers have long known how to apply all their data to engage their customers, but somehow, in the shift to digital, that knowledge has been lost. That doesn’t need to be the case.
Information is everywhere within an organization. Marketers shouldn’t limit their thinking to the obvious pools of first- or third-party audience data. By streaming CRM, audience and business-level data – and using all of that to power highly personalized offers in a real-time bidding environment – marketing can become a much richer and more integral aspect of an enterprise.
Marketers need to stop with the whack-a-mole and move on to something more challenging – and infinitely more rewarding.