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How Does the “Flood” of Customer Data Impact the Marketer’s Role?

With the rise of the digital world, and with the concurrent growth of online media business models based on advertising-supported free services that track customer behavior, the world has been flooded with data.

According to a 2013 study, 90% of the sum total of the world’s data had been created within the last two years. According to the U.K.’s Daily Telegraph, back in 2007, YouTube consumed the same amount of bandwidth as the entire Internet at the turn of the millennium.37

The explosion is still continuing. Later chapters cover how this data has been leveraged; this chapter moves on to investigate how this flood of data has changed the relationship between brand and customer.

From Art to Science

For as long as many in marketing can remember, the marketing function was acknowledged to be a delicate blend of art and science. To many of its critics in the boardroom, the needle often swung too far toward art.

Nowadays, science holds sway. Frans Cornelis, Chief Marketing Officer at global employment services provider Randstad, told me that:

“You’re no longer going to become CMO if you don’t know the numbers. [Marketing] has changed. It used to be—and there are still some places where this exists—that a beautiful campaign from the aesthetic point of view could conquer all evils. But in the vast majority of cases, marketers now must have an appreciation of the nitty gritty.”

Marketing202038, an in-depth study initiated by Millward Brown and led by Keith Weed, CMO at Unilever, found some interesting results: “Companies that are sophisticated in their use of data grow faster.”

Seventy-two percent of the marketing teams categorized by the study as “overperformers” were making their decisions based heavily on the back of data insights, versus 45% of those labelled “underperformers.”

Why does data have such an impact on marketing success? In large part, it’s because a marketer’s customer base has grown used to data—or rather, to the benefits customer experience gains from data. Those customers expect the relevance, precision, and value that a data-led marketing department provides. As Dominic Collins, Chief Marketing Officer for UK insurer Legal & General, puts it:

“Digital homogenizes expectations. That means that if you’re in a more heritage type business, or a legacy business, and you’re competing with pure [digital] plays, you can’t get away with not making the entire experience of your organization more digital and more modern.”

When a customer has experienced marketing from a data-led company—enabled by that data to provide timely, relevant messaging—those customers begin to expect this level of experience from every company they interact with.

This can be a problem for legacy brands. Virtually every market has a number of “digital native” companies: Consider Uber in taxi service, Netflix in media, and Airbnb in hospitality, to name but three.

Perhaps the most famous, and one of the earliest examples, is Amazon, the retail behemoth. Amazon and its peers have educated customers to expect a level of personalized service in their interaction with brands. Customers logging in to Amazon’s site see a personalized list of products. These customers see this not as an exceptional level of personalized service, but as the norm. “If the place where I buy my books can deliver personalized, relevant products and experiences, why can’t my bank? Why can’t the place where I buy my sneakers?”

For “predigital” companies competing with Amazon, not matching up to this new normal is a serious problem. It’s increasingly hard for these “heritage” companies to be able to get away with not offering an entire customer experience that’s more modern, relevant, and personalized. Data has driven a deep shift in customer expectation of their relationship with your brand.

More Data = More Accountability

Data also has had significant impacts on the marketer’s role internally. Close to 75% of CEOs agree with the statement that marketers “are always asking for more money, but can rarely explain how much incremental business this money will generate.”39 Marketers themselves seem aware of their weakness in tracking impact: Just over one-third say they can quantitatively prove the impact of their marketing outlay.

The increased availability of data has only added pressure on marketers to prove that impact. The belt-tightening engendered by the Financial Crisis of 2008 has prompted boardrooms to expect marketers to tie their activity to corporate KPIs. What’s more, marketers are being asked to do more with less. As Cornelis from Randstad points out, “The fat has been squeezed out of the industry.”

Marketers are under increasing pressure to stretch their budget a little further, of course—but it also means they’re expected to show real, tangible results for any campaign they produce.

The increasing capacity to track success and understand the more granular impacts of marketing decisions and strategies means the three-martini lunch, with ad space bought over drinks and a steak dinner, is a thing of the past. Were a marketer to repeat the tired old Wanamaker adage about not knowing which half of his budget was working, he wouldn’t be greeted with wry laughter and backslapping—he’d get a box containing his personal items and a request for his security pass.

Ten years ago, most marketing departments weren’t asked to show much in the way of return on investment (ROI). Nowadays, in this data-rich age, ROI is a huge focus. In fact, new three-letter acronyms have sprung up to keep consultants’ pockets lined and CMOs’ headaches consistent: return on engagement, return on relationship, and so on. As insightful metrics, they may all have limited utility—but one purpose they certainly do serve is to throw into sharp relief the pressure on marketers to show results.

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