Internet World 2013 & The Big Data Show

Digital marketing event Internet World 2013 and its sister event The Big Data Show were held in London this week. Timo Argillander reports his key findings.

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From campaigns to processes

The underlying message at the show was that today’s marketing is about processes, not just campaigns.

In a digital world, people are exposed of a wide variety of marketing messages that either directly or indirectly try to bring people to purchase decisions or to on-going customer relationships. It is acknowledged that all marketing channels form a combination where different activities also support each other. The most important thing for marketers is to develop and operate marketing strategy and processes that support co-ordinated marketing activities in different channels and that target consumers and their individual needs and habits.

This means that processes become more important than campaigns. This is a major shift in marketing industry. Old good virtues of copywriting and visual design are still important but become a sub-part of a larger process model. This change applies to all marketing, not just digital.

Big data: Great opportunities

Digital technologies provide major opportunities for marketers in the form of big data. Big data refers to collecting and analysing big volumes of data that is recorded by different digital systems. By analysing such data companies can detect behavioural patterns and other findings that can be used for targeting services and messages tailored for individual people. This would lead to better accuracy than targeting by demographic factors. For example retailer Ocado doesn’t show meat offers for users, who according to their browsing history are vegetarians.

Big data is described with three buzzwords beginning with V: Volume (there is lots and lots of data), Velocity (the data is gathered and analysed real-time) and Variety (the data is not structured but comes in diverse formats).

In addition to marketing purposes, big data serves various other purposes such as product development. For example car manufacturer can analyse which options consumers consider with online configurators. In another car industry case, Volvo collects a wide array of data on how vehicles have been driven. This helps them in product development and taking in account market area specific needs (read the case study here).

IBM presented findings from their big data study, which contains also Europe-specific findings. The study can be downloaded here.

Big data: How to do it

While the promise of big data is vast, there are no simple tricks how to put it in practice. The best that the conference presenters could tell was a generic model:

  1. Define the business case, what is the question you want to be answered
  2. Audit the data you already have
  3. Create plan A: define ways and processes to analyse the data
  4. Test and assess the results
  5. Enhance the process an reiterate

It was also recommended to run the first pilots utilising company’s existing internal data before starting to acquire information from outside.

These generic models often describe a big data rollout project but lack the long-running operational model.

We also heard two different perspectives at big data utilization. Some presenters talked about large-scale IT projects while others said that by using cloud services big data is available for small businesses as well. Open data was mentioned only a few times – supposedly marketing people haven’t found it yet.

Big data: Precautions and still a long way to go

Big data is about volume, but it still is critical to pay attention to the quality and reliability of data. Similar precautions were recommended as with market research. E.g. utilizing location data from smartphones would tell something about smartphone users’ movements, but such findings are not valid for all population.

Nate Silver and his book The Signal and the Noise was cited a few times. Silver states in his book that “our predictions may be more prone to failure in the era of Big Data”. If used in a wrong way big data can also be used to promote false interpretations.

People’s own interest towards their personal data also grows. In “quantified self” movement people collect their own data of health, environment, exercising etc. People also become aware about their rights regarding data: many want people to have the right to see what data of her or him has been recorded and the right to ask the data be deleted. Also people could want to transfer the data that a service provider has collected to another, competing service provider. In this area legislation is still vague.

“Social autonomous consumers” challenge customer service

BT’s Nicola Millard presented findings of their customer service study that covered UK and US customers. The study showed that every other person constantly changes the way (the channel) they deal with organisations but only 17 % of firms have made it easy to switch between service channels.

The study found that the share of three biggest service channels is declining compared to similar study in 2010. In early 2013, 77 % of customers say they contact phone call centres, 69 % email support and another 69 % go for face-to-face at physical stores. Channels that today are smaller are all showing growth. They are website FAQs (53 % of customers use them), webchat (37 %), Facebook (20 %), apps (20 %), Twitter (11 %) and videoconference (5 %). Millard predicts that webchat will show the fastest growth.

Millard noted that online services such as Amazon have set consumers’ expectation on a high level when it comes to service on digital channels.

Sky’s Mark Nicholson summarized the power of consumers: “You cannot control customers, but you can support them on their journey [towards purchase].”

“Mobile” is not important, “multichannel” is

Mobile has become a major channel for using digital services. In most demonstrations at the show mobile support was self-evident rather than something special. The emphasis was on designing multichannel and so-called responsive services. Mobile-specific opportunities such as location-based services were left in the background.

In an interesting move major UK mobile operators have launched a joint venture company WEVE that specializes in mobile marketing and transaction services. According to WEVE’s David Sear the company has a customer base of 15 million people that have given permission for mobile marketing.

David Sear also noticed that even that they were able to provide marketers advanced targeting techniques, a majority of firms want to target audiences in very traditional demography-based ways.

Facebook pushes mobile and search

Facebook’s UK sales manager Ed Couchman summarized their strategy. He admitted that Facebook had “completely underestimated” how fast people will move to mobile devices. Now mobile is their top priority and mobile design is also showing the way, how their desktop browser version works and looks like.

Facebook will also build strongly on their upcoming search function. Search and FB’s new push into gift recommendations for birthday heroes are based on user’s communities and connections. It seems that even though many tech- and privacy-savvy users turn features like those off, a big enough base of users silently accept that their connections can be used for marketing purposes.

 

Timo Argillander

Timo toimii sijoitusyhtiö IPR.VC:n managing partnerina ja Digital Media Finlandissa neuvonantajana. Timolla on pitkä kokemus strategiatyöstä ja muutoshankkeiden läpivienneistä yrittäjän, ammattijohtajan, konsultin ja sijoittajan rooleissa. Timon erikoisalaa ovat muuttuvien liiketoimintaympäristöjen ansaintamallit ja teknologiamuutosten tulkinta.

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