Use of Big Data in Marketing Still a Work in Progress
By James Tenser
Consumer products marketers are saturated in Big Data. It pours out in ever-increasing torrents from retail selling systems, marketing analytics, social media, search engines and mobile devices.
As an industry we’re well aware that Big Data is important, and pretty sure we know why, but we’re still figuring out how to make the most of it for the benefit of our consumers and our brands. Brand marketers want to leverage Big Data to improve performance at retail, connect with consumers more directly and effectively, and enhance the ability to differentiate ourselves from our competition. The effort is now underway in earnest.
A national survey of CPG marketers about their use of Big Data revealed the following:
- Nearly half (47%) are integrating new data sources to gain a better view of consumers.
- More than half (54%) are linking syndicated data with new data sources to improve promotions.
- Seven in ten (70%) have applied Big Data insights to sharpen promotion strategies.
- One in three (33%) have invested in Big Data technology, and another 17% plan to this year.
However, we are still seeking understanding about Big Data options and practices. Few companies have an enterprise Big Data strategy in place, and most are simply not ready with rationale, technology or the talent to put it to beneficial use:
- Two thirds (68%) are still determining the business case for Big Data
- Just 6% have deployed Big Data solutions in consumer marketing.
- Fewer than 10% have talent acquisition strategies that address Big Data opportunities.
- Only a third (35%) measure their Big Data program ROI.
The findings highlighted above are excerpted from industry market research conducted in late 2014 by the Shopper Technology Institute, in conjunction with VSN Strategies. Gartner Group participated in an advisory role on survey design and interpretation of some results. The Big Data in Marketing survey reached out to executives at manufacturing firms in the food and beverage, health and beauty, and general merchandise categories.
The investigation set out to learn how far along CPG marketers are in their knowledge of Big Data and what new practices they have adopted and plan to adopt as a result. Investigation and even some innovation are happening at these companies, but it is also true that Big Data adds complexity at the same time that it puts marketing ROI under an even more powerful microscope.
The survey reveals that CPG organizations are working diligently to get a handle on Big Data for consumer marketing. When asked what they are doing to get ready, two-thirds of respondents (68%) admitted their organizations are still working out the business case for Big Data initiatives. Four in ten are acquiring tools to enable them to process Big Data, which indicates the remainder haven’t commenced that activity yet. Referencing the subject of Big Data Veracity, 41.5% indicate they are working on ensuring data “trust,” with attention to data models, data quality and data governance.
In general, respondents indicate the consumer products sector is still in the information-gathering stages. Asked about their organizations’ level of adoption of Big Data, only 6% indicated they had reached the deployment stage, while more than 7 in 10 have yet to commence formulating strategy.
Brand marketers understand Big Data is important and are collecting it. They are addressing and formulating strategy, but their activities are confined to selective tactics, as we’ll see in the next section. The inability to measure program ROI may be a significant inhibitor to moving ahead more aggressively, but at this early stage, it is a hopeful sign that 35% are already able to understand what they are getting from their Big Data investment.
Even while they continue to define and refine strategy for Big Data, CPG marketers are forging ahead on Big Data-enabled activities and they are mining Big Data for insights that can guide marketing tactics. Naturally, as this survey focused on product marketing professionals, their responses reveal a heavy focus on promotion and targeting.
They are folding new types of data into the marketing equation including, but not limited to, those derived from social media. At the same time, they are struggling to derive value from these new activities and working hard to master new types of data and new analytic techniques. Most report success at finding new consumer insights as a result of Big Data activities, but other anticipated benefits have been slow to arrive.
When asked in what business activities they have applied Big Data insights, respondents revealed a high degree of focus on promotion strategies, targeting and segmentation. At the top of the list, seven in ten indicated they have applied Big Data insights to their promotion strategies, and a majority cited “targeting and segmentation” and “more targeted marketing” as areas of activity. Nearly four in ten respondents indicated that Big Data had been used to support new product or business model development.
CPG companies are moving ahead with more sophisticated kinds of data analysis, with more than half (54%) combining new forms of data with traditional syndicated data sources in an effort to improve promotion planning and execution in stores.
James Tenser is Principal of VSN Strategies, a content marketing agency focused on retail technology, and Director of Industry Relations for the Shopper Technology Institute. He may be contacted at email@example.com. Full survey results are published in “The Little Book of Big Data,” published by the Shopper Technology Institute and available on Amazon.com in paperback and Kindle formats.