Five data developments that will challenge marketers in 2015by
Data’s value as a commodity has soared in recent years, as it has become increasingly clear that its collection and analysis is a major determinant of business success.
Simultaneously, the cost of data collection and retention has fallen dramatically - one gigabyte of data decreased from $10,000 in 1990 to $0.10 in 2010 – as technical innovations have removed the barriers to mass data collection.
This is timely, as we are well and truly in the age of Big Data – powered by a surge in Human Data via the likes of social media and developing sources such as wearable technologies.
Data usage has become a key differentiator for brands. As Gartner’s Laura McLellan notes: “Ask progressive companies about their use of data and analytics in marketing and an unmistakable theme emerges. These companies value data more than their less progressive competitors. This isn’t just ‘lip service’. They spend much more money than others acquiring and analysing data, and they derive more value from it, both directly (by selling it) and indirectly (by distributing it throughout the organisation and acting on it). Managing, collecting and making use of internal and external data was the second highest area of CEO’s increased expectations for CMOs.”
So with data so high on the agenda, what are the trends that the experts think will shape the data landscape in the coming year?
1. Data quality will become more important than ever for marketers
Concerns about data quality in digital advertising have been growing, culminating in the recent revelation by Google that over 56% of its ads on its various display advertising platforms are never viewed.
However, despite this, the issue of data quality has not had proportional attention devoted to it. This could be set to change in 2015, according to Gartner’s Andrew Frank – and particularly as they realise that third party data can be just as compromised as their own.
“Many organisations take for granted that data about prospects and customers in their own marketing automation and CRM systems is incorrect, incomplete, duplicated, or our-of-date,” he notes. “This is one of the reasons they turn to third parties. But third-party data accumulated by aggregators and sold to marketers that can suffer from similar defects, as well as problems with opaque and dubious privacy protection policies applied to data collection and the potential that, as marketing technologies tackle the problems of click and impression fraud, fraudsters will find fertile ground in data markets. As marketers are compelled to rely more on data, the need to implement quality checks will grow dramatically.”
2. The rise of the chief digital officer
With data becoming an increasing strategic issue within an organisation, a growing number of brands will want executive level responsibility for the management of this valuable asset. This could lead to a spike in the number of chief data officers and chief digital officers implemented in the coming months
“With strategic insights through data about their customers’ behaviour and favourite products, as well as detailed knowledge of when and where people buy, companies can build their strategies based on proven insights and data. With this in mind, the role of the Chief Digital Officer will be created to promote the use of data as a strategic asset,” says Simon Walker, director of innovation at Stibo Systems.
“Tasked with tackling issues like stopping data from sitting in siloes and ensuring that staff have the tools and skills needed to analyse, understand and implement insights, this role will have a clear business focus on using data to formulate strategies, grow sales and improve processes within the organisation. The creation of this role has been predicted in previous years but this year the CDO will really become an influencer within organisations.”
3. The rise of predictive analytics
There are suggestions that lead scoring will give way to models that can deliver even more intelligence to the sales process in the coming year.
Lead scoring currently tracks activity between a prospect and an organisation and tries to predict - at the very first stage - what is going to turn into an opportunity. Nadim Hossain of Bright Funnel believes that in the future these analytics will go much further: “Looking at the whole funnel to understand how things are going to move from stage to stage all the way to revenue - really predicting the pipeline and the revenue in a way that marketers can actually react. The future of predictive analytics in marketing is not just predictive, but really being prescriptive.”
“Many predictive analytics tools are currently being developed that will be available both as stand-alone and integrations into popular CRM platforms.
Henry Schuck, CEO of DiscoverOrg, says: “Salesforce recently bought RelateIQ, which was basically a CRM that was built around analytics. I think that they’re realizing salespeople want to be able to see which prospects convert best and how that translates to other prospects who might follow the same pattern.” The tools are designed to help salespeople map out those high-likelihood prospects and use that template to identify more high-likelihood prospects. The process of identifying the best prospects will require less guesswork and sales efforts will be more effective as analytical tools become more widely available.
Craig Harris, CEO of HG Data anticipates: “More and more toolsets that enable large and even small companies to build these predictive models themselves. This is a very exciting time for sales and predictive analytics.”
4. Growing tension between privacy and personalisation
Increasingly sophisticated technology has enabled businesses to support the customer’s desire for more focused and tailored content and messaging in recent years. But there is also an inherent tension between personalisation and privacy. And with recent high-profile stories like the iCloud celebrity photo scandal alerting consumers to the dangers of data collection, this is only set to grow in 2015.
“On the one hand consumers are looking for more tailored and personalised offers, yet are concerned about loss of privacy. We like our brands to know who we are but feel uncomfortable when they know exactly where we are and what we are up to,” warns Shaun Smith, founder of Smith+Co.
“The mobile networks have proposed a roaming service in the UK which will improve network coverage and signal quality and thus improve the customer experience yet the security services are objecting on the basis that it makes it harder for them to track users. I think we will see more control over data pass to consumers with them selling their data to brands rather than brands selling consumer data on. I think we will also redefine loyalty schemes to be an exchange of trust and value rather than a transactional relationship.”
5. EU Data Protection legislation
The last time EU Data Protection laws were updated was two decades ago. But with a revision in legislation and effects coming into play for 2015, we can expect many significant and far-reaching changes for businesses.
Nicholas Mobbs, managing partner at Outbox, says: “With many citing that ‘Data is the currency of the 21st century’, the implications of any changes to the way we treat data will have a huge effect on sales, marketing and CRM operations for businesses not just in the EU, but any business with EU customers. No longer can companies claim ignorance over where their customer data resides, which systems are used to manage it, and even what data is held.”
Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 20 years, including Internet Works, CXO magazine and Business Management. He joined MyCustomer in 2007.