Apparently businesses have reached the frontier of ‘big data’. But what is this supposed new landscape and should marketers be hurrying to stake their claim? Alex Blyth investigates
In May 2011, McKinsey coined the phrase ‘big data’. It was one of those phrases that captured the imagination. It encapsulated an idea whose time had come. Moreover it promised a solution to the age-old marketing problem of data. It was an idea that made marketers throughout the world sit up and take notice.
The findings of the report, entitled Big Data – the next frontier for innovation, competition and productivity were genuinely startling. For example, the authors claimed that a retailer using big data to the full could increase its operating margin by more than 60 per cent. It claimed that if the US healthcare industry was to use big data creatively and effectively, the sector could create more than $300 billion in value every year.
McKinsey wrote, “The amount of data in our world has been exploding, and analysing large data sets – so-called big data – will become a key basis of competition, underpinning new waves of productivity growth, innovation, and consumer surplus.”
It is certainly an exciting idea for B2B marketers. As every B2B marketer knows – many through bitter experience – data is the cornerstone of a successful campaign, and it is incredibly hard to get right. Due to company changes, job moves, and so on, business data erodes at a frightening rate. So fast, in fact, that few B2B marketers have had the time or budget to raise their perspective above the basic factual data to the more exciting behavioural data awaiting them on the horizon.
So is big data really the answer that marketers are looking for? Or is it just a passing buzz phrase? And, most importantly, if it really can solve the problem of data once and for all, how can B2B marketers begin to use it to optimum effect?
Defining big data
We have all known for some time that with every day that passes the amount of data available is increasingly exponential. From the moment we could store records on a microchip and close down our dusty vaults, the barriers to data capture and storage were lifted, and the age of big data had dawned.
Today, turn on your computer and you are assailed by data from all sides, whether it is what your friends think of the latest film, to stock prices on the Nikkei, to where your boss went to university. The McKinsey report estimated that by 2009, US companies with more than 1000 employees held an average of 200 terabytes of stored data each.
Mike Quinn, product marketing manager at Adobe, says, “Big data is the unimaginable volume of anonymous data being captured by organisations on customers as they interact with automated systems. Every second of the day, the systems used to serve customers capture and store a wealth of data. To illustrate, Adobe currently processes 1.4 trillion transactions across the web, on mobile and via social platforms per quarter on behalf of its customers, which include the likes of Salesforce, John Lewis, Vodafone, Carphone Warehouse and Aviva to name a few.”
To date, this big data has been viewed as primarily a consumer issue. Given that there are more consumers than businesses that is hardly surprising. Yet, B2B marketers are also beginning to look at it with growing interest. Quinn adds, “Big data has major ramifications for B2B marketers. This is borne out by recent Forrester research that showed B2B marketers now have more money to spend with 40 per cent reporting their budgets are larger than in 2010.”
Offline big data
So what are the ways B2B marketers can use this big data? The first is to exploit the swathes of offline data they store within their organisations. Within almost every business is a vast untapped reserve of data from operational tasks such as stock control, supply chain management, financial management and customer services. By extracting this data, cross-referencing it with other data, and looking at it in a fresh light, B2B marketers can turn these idle terabytes into a source of significant competitive advantage.
Andrew Woodger, data and planning director at The Purple Agency, offers an example. “We have worked with a lighting wholesaler,” he says. “They delivered all their invoice line item detail to Purple each month. This was a million line entries from their invoicing system. We translated these line items into product categories, aggregated spend, and so on, at contact, site and organisational level.”
He continues, “We then deployed a simple, yet powerful suite of analysis and visualisation tools, which allowed the client’s marketing team to identify which categories clients were spending in, how much and how often they spent, whether spend was increasing or declining and which other categories were most relevant. This, in turn, helped create highly personalised and well targeted marketing communications, while at a more strategic level, the client could identify macro product buying trends.”
Online big data
The second type of big data is the fast growing amount of data accumulated through online marketing and ecommerce. Neil Mason, director of professional services at Global Dawn, explains, “Marketers can use deep data analytics to track users’ preferences, online and social footprints. This allows B2B marketers to see exactly what customer preferences are, and then to respond and engage with them accordingly.”
“The big data concept is simply a manifestation of how, in this age of digital, media and IT-based technology, every action or transaction leaves a digital footprint,” adds Woodger. “For example, an international publishing client associates anonymous web visits with source IP addresses. It uses previous web interactions to understand the interests and behaviours of customers so it can tailor content and communications.”
Perhaps the most compelling argument for getting involved in big data is the potential for real-time analysis and adaptation. When it comes to online, we no longer need to be restricted to just past behavioural and transactional data. It is all there in the here and now. As Mason puts it, “Using big data monitored in real-time, brands can take the end user on the journey they really want, rather than the journey brands imagine them to want.”
Affordable technology
Leveraging big data isn’t easy though. If it was everyone would already be doing it. In fact, many B2B marketers are aware of these possibilities but are so daunted by the size and complexity of the data in front of them that they are yet to use it as fully as they might. Technology is essential. With data on this scale it is impossible for humans to trawl through it, extracting the relevant facts and spotting the trends. Even if they could, they would do it too slowly.
Quinn comments, “Gone are the days when organisations could rely on a pile of business cards, targeted phone calls, long lunches, and mass spam emails. B2B marketers need to employ tools to automate the process of generation and extraction.”
The good news is, there is now a host of tools that will help them do exactly this. Furthermore, these are increasingly affordable to even small companies.
“With the advent of business intelligence tools, such as SPSS or Tableau, which are cost-effective, hugely powerful and enterprise class, now not only global businesses running SAP or SAS can gain the depth of analysis and the competitive advantage that embracing big data brings,” says Caspar Craven, director and co-founder of Trovus, a customer intelligence consultancy.
Shortage of talent
However, technology is only the beginning. As Craven adds, “The real problem for most companies is not getting hold of the data or the technology but finding the talent pool that can drive these apps properly, create the data strategies required and interpret the findings appropriately.”
The McKinsey report also identified this issue as the key challenge, stating that by 2018, the US alone could face a shortage of 140,000 to 190,000 people with deep analytical skills, as well as a deficate of 1.5 million managers and analysts with the know-how to use the analysis of big data to make effective decisions.
There are undoubtedly issues of privacy, security, intellectual property and even liability that need to be addressed in a big data world, but most experts agree that the talent shortage is the biggest issue. Alan Thorpe, business development director at Indicia, says, “The barrier to using big data is not a technological one. The main challenge for marketers is to ensure they have the right analytical skills to release value.”
A data revolution
If marketers are able to plug this skill gap, then we may be witnessing the beginning of a revolution in how we access and use data. Dan Sodergren is the commercial manager at augmented reality consultancy GoAugmented. He says, “LinkedIn contains a vast amount of data. Now you don’t need to have played golf with a prospective customer for seven years to know all about them – LinkedIn can tell you everything you need to know. What’s more, augmented reality can help you access it. We’re currently working with a client developing an app that will allow you to scan in someone’s face, at say a networking event, and access their LinkedIn records.”
For many organisations this is a long way off. Most B2B marketers are still struggling to persuade colleagues of the importance of data, some are beginning to understand the potential of big data, and precious few are starting to organise it in any meaningful way. The time has come for this to change. As Mason concludes, “There is nothing to fear about big data. It is a core component of the marketing landscape today, and increasingly it is the central job of the CMO to use it.”
Out with the old, in with the new?
So what does ‘big data’ mean for traditional data providers?
For many years B2B data has been the preserve of providers like Experian and Dun & Bradstreet. They have built global businesses by taking raw data from sources such as Companies House, directories, and publishers, organising it, cleaning it, and selling it to marketers who were desperate for good quality data to complement their creative ideas.
Some B2B marketers predict that the arrival of big data heralds the end of the road for these traditional providers. Why would we need to pay for this data when we can access it for free within our own systems or online?
Steve Cook, sales and marketing solutions leader at Dun& Bradstreet is not so certain that the end has come for his firm. “We are fully embracing the big data revolution, and we are adding value to B2B marketers who want to use it but are not sure how to do so,” he explains.
