Return on Investment with Marketing in a Big Data World

Return on Investment with Marketing in a Big Data World

For years, marketing and customer feedback was a slow moving process that didn’t always result in effective targeting. The ability for a company to quickly perform accurate and meaningful market research keeps them ahead of the competition and the changing desires of their customers.  Big Data is allowing companies to adapt to changes and identify poor ideas without spending the time and money it used to take to market a product.

The Columbia Business School put together a study in 2012 to analyze the return on investment of Marketing in the world of Big Data. “The aim of the study was to gain a better understanding of changing practices among large corporate marketers in the following areas: data collection and usage, marketing measurement and ROI, and the integration of digital and traditional marketing.” 

In traditional Marketing, there were 3 general types of data collected by marketers: Demographic, Customer Transaction, and Customer Usage Data.  Today, lots of user generated data is available to marketers.  Social Media Content, Social Network Ties, and Customer Mobile Phone data is now being collected to gain a better ROI on marketing funds.  

The study discovered that nearly all marketers want to be data driven, but the majority of these marketers are not collecting the data they need. Even companies that are collecting this new data are not utilizing it effectively.  The article has several recommendations to better use Big Data:

•        Collect meaningful customer data from a variety of sources, including real-time data

•       Link that data to metrics developed for measuring marketing ROI

•       Share data across the organization, linking datasets together at the customer level

•       Utilize this shared data to effectively target and personalize marketing efforts to customers

Being able to measure a ROI for your marketing efforts is a critical metric to get an understanding of how well the department is doing.  The study shows that new digital tools are being used more than the traditional marketing tools, but the ability to measure the ROI on these new tools is lacking. 

 

In channel-specific engagement avenues for specific marketing endeavors, these new digital tools have completely overtaken traditional marketing techniques.

 

The study’s final recommendation for determining market ROI:

• Make sure you’re using some kind of metrics on most of your marketing.

• Be ready to invest in getting some kind of data relevant to your measures.

• Make coordinating your traditional and digital media campaigns a goal.

• Set specific measurable objectives for all your campaigns.

• Put ROI in stated objectives for all your vendors (so they know your expectations

    to retain them or to cut them loose).

• Link marketing ROI to employee compensation, perhaps a bonus.

• Start today… as the pay off and learning curve will likely take a few years.

In summary, there is a big movement by marketers to incorporate these new sources and types of data in their marketing strategies.  Although there is a lot of evidence to indicate that these marketers are accepting of the new data, they are having trouble measuring the ROI on these new types of marketing projects.  Just as we have seen a rise in marketing in nontraditional avenues (Social Media, Mobile Devices),  we are just beginning to scratch the surface on our ability to interpret and measure the financial rewards of this new marketing world.