Big Data & Advanced Analytics

There are multiple ways in which Big Data and advanced analytical tools are revolutionizing marketing. From creating new possibilities in areas as diverse as personalization to pricing to customer relationship management to lowering customer acquisition costs, Big Data and associated tools are helping marketers boost innovation, loyalty, business reach, productivity, and marketing effectiveness, while reducing costs.

Customer Understanding & Hyper-Personalization

In their new book Streaming, Sharing, Stealing: Big Data and the Future of Entertainment, Michael Smith and Rahul Telang—two professors at Carnegie Mellon University’s Heinz College of Public Policy and Management – explore how companies like Amazon, Netflix, Spotify and Hulu are changing the face of the media industry by exploring the power of Big Data. According to them, Netflix using Big Data insights to create unique original content, such as the hit series House of Cards, illustrates how a bunch of different changes coming together at the same time can be really disruptive to the traditional media industry. Of course at centre stage of these changes is Big Data, and for entertainment behemoths such as Netflix and Amazon, handling Big Data has become second nature, a necessary core of their corporate strategy. “You do not make a $100 million investment these days without an awful lot of analytics,” Dave Hastings, Netflix’s director of product analytics, recently said at the 2016 Wharton Customer Analytics Initiative Conference13.

Another company making use of Big Data to disrupt its industry is the music giant Spotify that uses a Hadoop big data analytics platform to gather massive amounts of data from over 60 million active users worldwide. Spotify then uses that analyzed data from user profiles, playlists, and other historical data to make informed, personal and relevant recommendations to individual users of other music they might enjoy listening to – a classic example of hyperpersonalization. Spotify also uses big data and predictive analytics to add fun to the consumer experience. One case in point is the Grammy Awards, where Spotify uses streaming data to predict award winners each year14.

Customer Engagement, One-to-One Marketing, Retention & Increasing Lifetime Value

A 2014 Forrester9 survey reports that mature big data marketers see significant return on investment in both engagement and lifetime value. It says firms that have implemented these tools see significant increases in customer engagement, customer retention, and upsell and cross-sell revenue.

According to the report, a senior marketing director at a multi-brand US retailer found that their investment in big data allowed them to influence the behavior of shoppers in the moment and give a one-to-one discount program that got the best results. Another marketing director at a grocery retailer said they used Big Data to influence shopper behaviour by orchestrating customer experiences in real time; the better experiences helped them maintain their premium pricing9.

Customer Analytics And New Product & Service Innovation

A 2014 Datameer study10 found that companies across a variety of industries were leveraging Big Data as a competitive advantage with Financial Services taking the lead followed by Technology, Telecommunications & Retail. Of these 48% use cases were about leveraging Big Data for superior customer analytics while 10% were employing it for new product and service innovation.

SEO/SEM/Email Marketing/SMS Marketing

A recent Spencer Stuart survey11 of 171 U.S.-based marketing executives found that marketers have widely embraced Big Data. Also 58 percent of survey respondents said the areas of digital marketing where Big Data is having the largest impact on their marketing programs are search engine optimization and marketing, email marketing and mobile marketing. Over time, data and analytics will play an even more important role in their overall marketing strategy, respondents said11.

Content Marketing

According to a 2015 Harvard Business Review article12, Newspapers such as The Guardian and The New York Times have invested heavily in data journalism because they recognize that the world of Big Data offers opportunities to uncover new insights, and to tell stories in newly compelling ways. Simultaneously, a few exceptional brands like OKCupid, General Electric, and Kickstarter have also grasped that data-driven stories attract the kind of social media attention that publishers dream about and are using this insight to drive their content marketing by creating original and fascinating stories from their proprietary data. A good example is Jawbone, which has uncovered some fascinating insights from all the folks wearing its fitness trackers – like when people in different cities wake up and go to sleep – and published it in the form of a widely shared infographic. As the HBR article points out, these brands recognize what many other brands should be doing: opening the treasure chest of their Big Data and offering some of that wealth back to customers and the public in the form of original content12 that markets the brand at the same time.


In the opinion of a 2014 Mckinsey article8, on average a 1 percent price increase translates into an 8.7 percent increase in operating profits (assuming no loss of volume). And yet according to the authors, up to 30 percent of the thousands of pricing decisions companies made every year failed to get the price right – which translates into loss of a lot of revenue.

With Big Data to help them, companies can now make significantly better pricing decisions if they can bring order to Big Data’s complexity which is not easy considering the number of customer touchpoints keeps exploding as digitization fuels growing multichannel complexity. However, the value of doing so is substantial – millions of dollars. As the article opines, the secret to increasing profit margins is to harness big data to find the best price at the product—not category—level, and companies can do that by employing good analytical tools to listen to the data properly and using automated systems for product clustering and consumer microsegmentation among other things8.

Campaign Optimization

In many cases, Big Data and sophisticated analysis illuminates variables that have gone overlooked, and have perhaps been hidden to marketers. For example, As Forbes points out, Walmart used such sophisticated insights to conclude that berry sales are higher on days with warm temperatures and low wind, while hamburgers are a more popular purchase on hot, dry days. Through this next-level understanding, the company can create marketing campaigns and messaging specifically addressing these factors. It can even adjust prices for products according to the anticipated demand for such items27.

This is not all. Big Data continues to revolutionize the marketing discipline in other areas such as Customer Journey Mapping, fine-tuning Go-to-market, Time & Location-based Marketing, Sentiment Analysis, Direct Marketing, Performance Marketing etc.

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