The Data-Driven Marketing Approach

The Data-Driven Marketing Approach

🔥 In today's highly competitive world, providing customers with a customized experience often leads to good business results. In order to customize marketing efforts and meet the changing expectations and progressive needs of customers, companies can take advantage of big data. A data-driven marketing strategy can be a powerful advantage in marketing. Here is a brief overview.

What is Data-Driven Marketing? Definition

Data-driven marketing is a type of marketing that uses massive amounts of data, acquired through customer interactions, analyzing company-generated and market data, or from external sources to gain a better view of customers' motivations, preferences, and predict future behaviors to help companies optimize their marketing processes, and in-turn enhances their customer experience, which leads to greater revenue and profits.

What are the Main Benefits Of Data-Driven Marketing? Advantages

IMPROVE AUDIENCE TARGETING. With the right data, you can know exactly who is engaging with your marketing efforts through which channels, which will help you focus your marketing efforts on the right media in the most effective times and ensure that the personalized messages are falling in the right place.
OPTIMIZE CUSTOMER EXPERIENCE. Using big data helps to provide more insights into what areas need improvement. You can evaluate and adjust as necessary so that the customer experience is optimized.
IDENTIFY THE TYPES OF OFFERS THAT CONSUMERS MOSTLY RESPOND TO. This allows you to focus your marketing efforts on projects that will offer a high ROI and are of the highest value to the consumer.
MAXIMIZE THE EFFICIENCY OF MARKETING EFFORTS. By reducing wasteful spending, improving resource allocation maximizing ROI, and supporting the marketing mix elements as it improves their interactive engagement with individual prospects.
INCREASE PERSONALIZATION. By connecting with the right target markets and delivering more personal and meaningful messages. Therefore enhancing customer-centric marketing.
SUPPORT PRODUCT DEVELOPMENT. By reducing the risk of product failure through a better understanding of what consumers would like to see in future products and by providing secure pricing options.

WHAT ARE THE CHALLENGES OF DATA-DRIVEN MARKETING?

COLLECTING THE RIGHT DATA – There is a huge amount of data, but turning it into insights is not easy, therefore, it is important to have the right marketing tools and experience to gather and analyze the correct data which will be most effective and beneficial for data-driven marketing.
INTERPRETING DATA – You must understand the data collected in order to know how it can be used effectively.
LINKING DATA – You must link data to form a cohesive 'big-picture' to help you determine how successful the strategy is. If certain data cannot be linked to other data points, there's a good chance that the information is irrelevant and not beneficial to the strategy.
TIME AND EFFORT CONSUMING- Data must be available to all departments in order to be able to analyze it and use it in marketing strategy, but applying this process requires effort and time.
REDUCE CREATIVITY - The intense focus on using data in the marketing decision-making process can come at the expense of creativity, depending on how marketers choose to leverage data-derived insights.

⇒ Please share any experiences or further recommendations with respect to Data-Driven Marketing. Thank you.

Resources:
- Erevelles, S., Fukawa, N. And Swayne, L. (2016), "Big Data consumer analytics and the transformation of marketing", Journal of Business Research, Vol. 69 No. 2, pp. 897-904.
- Camilleri, M.A. (2019). The Use of Data-Driven Technologies for Customer-Centric Marketing, International Journal of Big Data Management.

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Jayaram
Business Consultant, India

Applications of Data Driven Marketing and Competitor Info

In today's competitive world and changing economic and business situations, I totally agree and believe in this. Data Driven Marketing can also help with competitors activity analysis, new market requirements, new product development etc. The only missing point here is price indicators as quite often we can't access the prices of competitors
But sometimes, like when one want to enter into export of products, from the market information, nowadays it is possible to get the price indicators of competitors.

Shubhi Kotiya
CxO / Board, Germany

Performance Branding (Data-Driven Branding)

Data-driven, "Performance Marketing" approaches can now also be applied much more effectively to branding and demand-generation activities. With a clearer understanding of consumer preferences and behaviours at the early stages of their buying journeys, by applying more precision in branding, companies report considerable marketing efficiency gains of up to 30% and incremental top-line growth of up to 10% without increasing the marketing budget.

Traditional MROI approaches have certain limitations

Existing models are overly focused on late funnel stages of the customer journey.
Existing models are focused on the past.
Exisitng approaches struggle to account for the impact of message and creation.
There is a gap between MROI measurement and marketing execution.
Most existing approaches do not support real-time optimization.

Moving to Performance Branding

The considerable improvements in data-tracking technologies are enabling "performance branding" - a discipline that is as rigorous and successful as more mainstream performance-marketing practices. The principles of performance marketing can be applied to the early stages of the consumer decision journey and to traditional media.

Example of Performance Branding

Examples of data-driven branding include the following:

MEDIA CONSUMPTION: The impact of traditional advertising can now be measured at the Individual and household level. For example, many smart TVs have a unique IP address and are equipped with automatic content-recognition (ACR) technology for tracking of view rates of ads..
IDENTITY GRAPHS: An identity graph is a collection of user-level data combined with identifiers such as digital cookies, physical addresses, email accounts, and mobile phone numbers. These data sets help advertisers to better understand consumer preferences and habits.
INDIVIDUAL-LEVEL TRANSACTION DATA: In order to monetize the data sets, retailers increasingly provide access to individual-level transaction data to manufacturers and advertisers. By combining these data sets and their own records, advertisers can calculate the advertising ROIs.
PERSONALIZATION OF CONSUMER SURVEYS AND PANEL DATA: With agile insights applications, questionnaires can now be customized, and individual responses can be matched with an existing individual-level database.
TECHNOLOGICAL ADVANCES: The increasing capacity for data storage, faster IT infrastructure, and partial automation is allowing market researchers and data scientists to handle much larger sample sizes.

As a result of these developments, a larger part of the branding and marketing budget can now be managed like a true investment and marketing ROIs can be more easily measured.

Core Elements of getting Performance Branding right

Good data and a universally accepted source of truth: Building out a customer data platform (CDP) that incorporates data that incorporates data from internal sources, external partners, and third parties in a compliant fashion and at the level of individual customers and provides links to execution platforms. The CDP needs to be developed and managed by a trusted team that can also oversee the integrity of the data.
Agile Operations to move quickly and learn: These allow teams to both make quick tactical decisions and incorporate learnings to continuously improve offerings.
Close collaboration with well-vetted agencies: Marketing teams should work closely with their agencies on key elements of performance branding.

Source:
Thomas Bauer, Julian Boudet, Michael Lamb, Kelsey Robinson (2021. "Performance Branding and how it is Reinventing Marketing ROI", McKinsey and Co.