Big Data and Automated Closed Loop Marketing
Businesses are leveraging big data for the benefit of driving marketing insights and initiative incomparable to any time in history. We are only at the very beginning of this wave, but this fundamental shift will create several multi-billion dollar winners. And, according to Ajay Agarwal of Bain Capital Ventures, a set of technology companies will emerge as the marketing equivalents of Salesforce and SAP.
By 2017, a CMO will spend more on IT than the CIO. – Gartner Group
Driving these initiatives are CTOs and engineers who have experience with big data and modern techniques for data mining, analytics and machine learning. Solution providers in this space typically charge on a performance basis (as opposed to charging traditional enterprise software license fees) and they are having a significant impact on their customers’ revenues and profitability.
Transition from “Back Office” to “Front of House”
The world of enterprise application technology has gone through a number of iterations and significant evolutions over the past 30 years.
In the late ’70s and ’80s, enterprise software consisted of mainframe and minicomputer solutions designed to handle various back-office functions such as finance, HR and manufacturing. Over time, the winners in each of these functional applications areas — SAP (manufacturing), Oracle (financials), PeopleSoft (HR) — began expanding into the adjacent categories, spawning the ERP wave (enterprise resource planning).
During the ’90s, these companies became behemoths, thanks to a range of factors — the movement to client/server infrastructure, the buzz of corporate “reengineering” and, of course, the urgency surrounding Y2K; not to mention the growth of the large system integrators.
Despite the last 15 years of sales automation, marketing functions have largely been underserved in terms of enterprise software. While the other corporate functions have all spawned multibillion-dollar software companies, the marketing function has been underserved and absent amongst the mega IT corporations.
Is Marketing Automation Data-driven or Process-driven?
Historically, the challenge with marketing automation is that it has always been about “process”. At the end of the 20th century, marketing solutions were tools used to manage campaigns. Examine some of the more recent entrants and categories, such as email marketing or marketing automation, and you’ll find they’re focused on process automation. I.e. how to take a set of manual tasks and streamline them, track them or automate them.
The problem is that marketing-focused software solutions have never been about strategic data. Unlike financial software, which serves as the system of record for the general ledger; or manufacturing resource planning software, which “owns” the bill of materials; or sales-force automation, which is the system of record for the pipeline and the funnel, there is no equivalent for marketing.
Until recently, it has been difficult, if not impossible to collect structured data on marketing prospects who were not customers. Companies have focused on reach and eyeballs to their website missing out on proactive engagement and the social nature of sales opportunities. Without this data, the best that marketing technology could do was improve the process of decision making as opposed to delivering real insights.
The Web Changed Everything
According to IBM 90% of the data in the world today has been created in the last two years alone. Big Data comes from a very diverse range of sources. It ranges from posts to social media sites, digital pictures and videos, purchase transactions and location data as well as personal data voluntarily provided by prospects.
All the gadgets and devices, and machines at our fingertips are constantly generating data relating to our offline and online activities.
Organisations collect data about their customers in order to develop more meaningful relationships, send more relevant messages and offer them more appropriate products. The aim for these vast quantities of data is to help organisations interact more effectively and efficiently with their target market.
To meet the demands of large data sets and respond rapidly to fluctuations, targeted automation is a must have. – McKinsey&Company
The need for automated marketing arose as companies needed to be efficient and effective in generating leads and automated marketing provides ways to streamline sales and conduct repetitive manual processes.
Marketing automation platforms help nurture and qualify marketing leads. Automated marketing makes it easier to generate leads from a variety of online and offline marketing channels. It usually involves the creation of welcome campaigns and followup email sequences.
As suppliers and solution providers add more features and functions to their websites, these platforms are becoming more and more sophisticated.
As more and more businesses across all sectors of the economy continue to evolve on the web, a massive amount of data has been collected and — is finally available for analysis.
- A web business can mine thousands of signals from its prospects based on the hundreds of actions a consumer might make on a website (checking a price, looking at an image, reading a review, typing in a detailed search query, etc.).
- The holy grail of automated closed loop marketing is within reach. With sophisticated technology and analytics, marketers can link spending on customer acquisition directly to a set of downstream customer actions — whether those actions take place on the web, on a mobile device or in a physical location.
- Consumers with smartphones are conveying their intent while scanning QR codes, downloading mobile coupons or simply walking into a store with their location-aware device.
- Social networks are providing a new source of demographic data that, combined with Facebook’s Open Graph, offer marketers a new treasure trove of information.
Marketing Departments are Late Adopters of Technology Automation.
From ERP and Manufacturing to HR and Sales, virtually all other departments in large organisations have either been automated or have the capability of being automated.
In five years, CMOs will outspend CIOs on IT. – Winsper
Marketing is among the last to become automated and opportunities exist for greater effectiveness, efficiency and competitiveness with organisations that ride the wave of big data and automated marketing early.
With literally hundreds of analytic tools in the marketplace measuring social media, SEM, PR, online advertising, website analytics, etc., data is being collected at a record rate but underutilised when it comes to providing meaningful insights.
Ongoing chatter suggests that marketing will be investing in IT solutions at a rate greater than the IT department itself. Establishing a robust Marketing IT strategy that aligns the ultimate higher benefit of Marketing ROI is critical before millions of dollars are put into play.
If there’s anything to take away from the relationship between a Big Data future and Automated Marketing, it’s this…
Ensure you have a comprehensive digital strategy for your marketing infrastructure in place.
Main image courtesy of Jasonr611