The Keys to the Future of Data-Driven Marketing
Data has become one of the best metrics for measuring and delivering success in a variety of fields. Marketing is no different.
The use of data in marketing has enabled better practices and more accurate planning, delivering better results for businesses and their clients.
Data-driven marketing is also proven to increase ROI. Campaigns that leverage data-driven personalisation reported 5-8x ROI for their campaign spend.
We spoke to marketing experts to see where the future of data-driven marketing is heading and what makes it so effective.
How data-driven marketing has improved the marketing process
Whether you are always aware of it or not, marketing is all around us. Everything we consume, utilise or engage with uses marketing to be seen and distributed.
Today, we know that people receive between 300 and 3000 marketing messages a day, but only really retain a maximum of three.
What data-driven marketing has done so effectively though, is streamline the marketing process. It shows us the things we are interested in and directs us to the businesses we would probably enjoy.
“For a long time, the challenge with traditional marketing has been two-fold. First, the lack of ability to be super targeted and offer a personalised experience. Second, the inability to attribute marketing contribution across all channels and focus on the right metrics.”
“Data-driven marketing has helped to solve both. When done right, it helps to build an approach that reaches the right user, at the right time, with the appropriate message, motivating an action.”
“It also helps to measure the effectiveness of marketing channels by understanding the customer journey. This insight then demonstrates the value of marketing as a revenue generator within a business.”
Hinda Smith, a Marketing Consultant for various companies, further highlights the impact of data on marketing, by explaining how it helps marketers to display the importance of their role and how they’ve influenced positive results.
“Every good marketer will have to fight the good fight – prove how marketing contributes to the bottom line. Marketing budgets are usually the first to go when the business underperforms.”
“When marketers can dig deep into their data from their website, customer product or app use, and identify ideal customer traits and behaviours, they can begin to prove the impact of marketing dollars to sales and revenue.”
Ed Falconer, Managing Director of Data-Driven Marketing at Accenture, agrees with this sentiment. He also emphasises the significant contribution that data-driven marketing makes to modern businesses.
“One of the biggest areas marketing struggles with is measuring how it contributes to growth and business performance. If marketing can’t demonstrate that it is a profit centre, it will always be under the microscope, especially when times are tough.
“Data-driven marketing can drive continuous optimisation of the budget and tangible results. At its best, data-driven marketing is designed to target customers with relevant messages and offers that they care about.”
“By properly harnessing the data, organisations can contextualise the message to the moment and customer’s intent, creating rich relevance for the individual and a heightened level of interest from the customer.”
“It is also worth noting that this doesn’t have to be on a one-to-one basis. Informed messaging can be at a geographic, audience and segment level, as the technology underpinning data-driven marketing can automate these processes.”
The Challenges of Data-Driven Marketing
Though the proliferation of data has significantly improved marketing practices, it doesn’t mean that there aren’t concerns and challenges around it.
The biggest and most obvious challenge is the handling of data. Finding the balance between using data and preserving customer privacy needs to be at the forefront of data management.
Sardana is of the opinion that there is no one person responsible for data protection, but rather that it is a joint effort from everyone involved in the process.
“Customer privacy is a collective responsibility of brands, agency partners and technology platforms. There are three key steps to balancing the use of data while preserving privacy:
- Having a first-party measurement framework where brands directly ask users for consent to collect and use their data. Giving consumers a choice is the key here.
- Supporting technology partners and publishers who have credibly built a consent-driven relationship with their audience.
- Building a team with expertise and knowledge around responsible marketing approaches as well as having the right measures in place to ensure a privacy lens on every initiative.”
Smith says the best way to maintain balance is to “keep learning. The rules can change frequently, especially with the introduction of Australia’s CDR (Consumer Data Rights).”
“As a marketer, always be transparent and honest in how you will use personal data captured. Use an opt-in/opt-out communication method for potential buyers. Most buyers are willing to share some personal details for a valuable exchange, so make sure your marketing content delivers value and solves customer pain points. “
According to Falconer, it’s relatively straightforward for a business to ensure privacy from the outset – “To put it simply”, he says, “follow the legal rules, apply common sense, show empathy for the customer and test.”
He goes on: “Before using any data, organisations can follow some simple steps:
- Think about the sensitivity of the product you are promoting.
- Think about the level of sensitivity of the behaviour or event that leads to the need for this specific product.
- Think about the data being used to identify this event.
- Think about how the product is represented in the messaging.
- Consider if how the message is approached and delivered will make anyone uncomfortable.
- At the last mile – test it.”
Emerging Technologies and Processes in Data-Driven Marketing
Like all technologies, data-driven marketing is constantly growing and adapting. New and better processes are constantly found and explored.
In regards to the best processes, Sardana says, “the key to data-driven decision making is to ensure that the data is processed into understandable information which, when analysed generates actionable insights.”
“With the rise of AI platforms, analysis and optimisations are done in real-time — reducing the time to get from data to insight. Marketing measurement & modelling platforms help uncover insights & better understand the contribution of each media channel, giving marketing teams the ability to better understand marketing ROI.”
Falconer suggests that it is worthwhile looking at this in terms of ‘creating knowledge’ and ‘activating knowledge’:
- Computing power and the advancement of data science and analytics.
- Improvement and evolution of experimentation platforms. And,
- Technology development.”
- Marketers benefit from the rise of decision engines and across channel (often referred to as omni-channel) campaign management platforms.
- Enables the storage and ready use of content to support all these contextual and informed messages we want to send to customers.”
How Companies Can Empower Their Marketing Teams
We’ve looked at how data-driven marketing works. Now, how can companies best support their marketing teams in utilising their data?
Sardana is of the opinion that “the real challenge facing marketing teams today is having the right expertise in the team to generate actionable insights.”
“Being a data-driven marketer simply means building marketing & business strategies based on insights pulled from the analysis of big data. It is all about understanding the data we have and a clear process of organising, analysing and applying that data to inform future decisions and ultimately, provide a delightful customer experience.”
“At Optus, we are empowered to be data-driven in our day to day work. From adopting new technology solutions like AI Marketing Platforms and marketing attribution modelling, to building a 360-degree central view of every customer, Optus is at the forefront of championing data-driven marketing.”
“But it doesn’t just stop at having the right tools; the company embraces a culture of sharing insights and showcasing the power of data-driven decision making through a robust test and learn mindset.”
Smith’s top tip is to “never stop asking questions! Ask yourself, what does my customer want (not need) from the business? Talk to other departments within the business.”
“Being a data-driven marketer means being accountable and having smart marketing objectives that are meaningful to the business. Show how your marketing efforts will impact every stage of the buyer lifecycle – awareness, consideration, conversion.”
“Don’t be afraid to show and celebrate the improvements once a data-driven approach has been introduced.”
Falconer tells us that Accenture recommends its marketers be more data-driven by:
- Using data to be strategic thinkers: understanding how to build a strategy driven by data.
- Creating customer insight: using data, research and analytics to prioritise customer segments, and audiences, identify contextual moments in a customer decision journey and targeting each customer based on preferences.
- Effective content management: recognising that content itself is data and can drive better results if managed, stored, selected, re-used and measured effectively.
- Experimentation: Instilling experimentation as a necessary part of the process to continually stress test and find new ways to engage with customers.
- Measurement: Training marketers to always think measurement and performance as a first step.
As he says – “In a nutshell, data-driven marketing is about bringing together analytics, strategy, creative and technology. It is about using data at every step of the marketing process.”
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