Data-Driven Marketing – What Investments are Making a Difference to the Bottom Line?
In today’s day and age, data is being created exponentially. In fact, in the last two years alone, 90% of the world’s data was generated. By 2020, it’s estimated that 1.7MB of data will be created every second for every person on earth.
Clearly, with so much data, brands have plenty of opportunity to know their customers and to use data-driven tactics at every turn. According to research by Econsultancy and Adobe, improving the customer experience, creating content for digital experiences and using data-driven marketing that focuses on the individual ranked highly as companies’ most exciting opportunity for 2019.
Marketing today is no longer driven by gut instinct alone – most brands have implemented some form of data-driven marketing. For example, using first party data to better understand customers or utilizing third party data sets to add additional insights to consumer records. However, despite the wide availability of data, effectively utilizing this data presents its own unique set of problems.
Creating a consistent customer view to drive marketing decisions and consumer experiences is at the heart of data-driven marketing. However, many marketers are challenged in creating this consistent customer view. With the explosion of more data, marketers must decide which data is relevant, capture it, and integrate it in a timely manner before new real-time data sources are introduced and alters the customer view.
In research by Experian, 46% of marketers stated that technology was the biggest barrier to integrating customer data. An additional 43% pointed to data access across the organization and 41% stated that technology to house and collect customer data was a challenge.
In another study by Forbes Insights, survey respondents may have a database but their existing database doesn’t fully support their data unification needs.
Spend on data-driven marketing initiatives continues to surge. In a report from the DMA and Winterberry Group conducted in late 2017, early 2018, 44% of research participants reported increasing their spend on data-driven marketing initiatives during the second half of 2017 compared to the previous 6-month period.
On a 5-point scale (where 5 equates to a “significant increase” in spending), second-half spending growth registered an index score of 3.53. That’s the highest single-period growth posted in more than 5 years of the DMA’s research on the topic and is considerably above the prior peak set in early 2016 (3.42).
Data-driven marketing revenue also increased and the revenue growth index score of 3.69 was the highest in the survey’s history.
What Data-Driven Investments are Making a Difference?
Advancements in technology, more types of data and new types of marketing technology give marketers plenty of options in where to invest.
Customer Data Platforms
Many companies this year are turning to customer data platforms as a way to integrate siloed data and create a consistent, 360-degree customer view. In research published by BlueVenn, 51% of companies are already using a CDP while 35% plan to do so in the future. Only 14% of companies stated that they have n plans to do so.
According to the research, those companies who are using CDP are more than twice as likely to have significantly outperformed on their marketing goals for 2018. About 24 percent of companies with a CDP reported significantly outperforming their marketing goal in the prior 12 months.
More companies are also investing in purchase-intent data. While demographics and lifestyle data will always play a critical role in developing a comprehensive customer view, newer types of purchase intent data are providing deeper insights into what a consumer is likely to purchase next.
For example, in the home retail industry, V12 is able to provide insights into 190 million monthly searches for furniture and home accessories, allowing brands to reach consumers who are actively seeking to make a purchase. Mobile location intelligence also provides additional insights by allowing brands to reach consumers who have recently visited a store location or a competitive store.
In the automotive space, V12 provides insights into 1.7 million monthly car shoppers who have recently visited a dealership. These leads include name, address and other demographic and vehicle data so brands can send highly personalized communications.
With consumers having so many choices in where and what to purchase, brands must continuously strive to stay one step ahead. Predictive analytics provides a way for brands to predict a consumer’s future actions to in order to provide the most relevant messaging across a consumer’s preferred channels. Predictive analytics is a form of analysis conducted by leveraging AI and machine learning to combine the insights generated through various datasets, algorithms and models to predict future behaviors.
According to research by CMO.com, predictive analytics ranks as a top priority this year. 56% of companies are using AI technology to develop predictive analytics and insights into consumer behaviors.
According to RedEye, predictive analytics are providing an uplift in customer lifetime value, with 32% of companies reporting a significant uplift.
With the market becoming more complex and customers demanding a personalized experience, data-driven marketing is the only way forward. Marketers are becoming more focused than ever on using data-driven insights to better understand their customers and boost their overall competitive advantage.
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