How Leaders Use Data in Marketing

The best digital marketers use these specific data and analytics tactics to exploit new opportunities.

Massive amounts of internal and externally available data provide marketers with significant opportunities to specifically target customers. However, “The most powerful data you have is something you are sitting on that nobody else has,” said Martin Kihn, research director for Gartner for Marketing Leaders, in his session at the Gartner Digital Marketing Conference. Digital marketers can look to progressive companies to learn how they create marketing value and opportunities from data.

Successful companies employ several tactics to exploit data in their web campaigns. Zappos uses location data to suggest shoe styles next to a customer’s current weather forecast. Neiman Marcus utilizes personas to suggest tailored fashions. Or think of how companies use retargeting such as Volvo’s ad that follows a shopper around the web. Now, consumers expect this type of targeted marketing from all brands.

Beyond these marketing tactics, data becomes a strategic weapon in the hands of a company such as Netflix, which uses detailed customer knowledge to dynamically promote content and create new programs. Mr. Kihn noted, “House of Cards was a big data project.” The company can analyze the appeal of talent to audiences, index topic and tone to success, and adjust timing and recommendations. “They can create an entire series that‘s most likely to do well,” he said.

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Progressive Companies Analyze More Data
Not all digital marketers use data to their best advantage. The difference lies in where marketers’ stand in their evolution and sophistication on the digital marketing journey.

Gartner identified three segments from among 226 respondents in its Data-Driven Marketing Survey: embryonic (25% of respondents), intermediate (47%) and progressive (28%). Compared with others, progressive companies spend more than seven times as much on digital marketing analytics. They spend much more money than others acquiring and analyzing data, and they derive more value from it, both directly (by selling it) and indirectly (by distributing it throughout the organization and acting on it).

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To maximize return on this spend, progressives enact the following five techniques.

  1. Monetize more of their data
    Progressive companies sell aggregated data to data collection companies, twice as many as intermediates and 3.6 times as many as embryonics.
  2. Use more external data
    Progressive companies attach more value to data and this leads them to use more external data. Intermediates and progressives purchase identical amounts of data outright, but progressives get more than 20% more of their data from channel or agency partners than intermediates, and almost 70% more than embryonics.
  3. Use more analytics services
    The growing shortage of skilled resources creates bottlenecks in the marketing organization. As data driven marketing efforts grow, Mr. Kihn suggested you’re probably going to have to increase your reliance on marketing service organizations to augment your internal staff and supply the analytics skills you need.
  4. Build more capabilities in social, mobile and media analytics
    Social analytics, in particular, are starting to look like table stakes for intermediate and progressive digital marketers. But don’t relegate them to junior employees, Kihn warned. Monitoring and managing social analytics requires top talent.  For media analytics, progressives are probably more likely to experiment with insourcing media planning and buying operations using their own data-driven algorithms, rather than leave these in the hands of a media agency.
  5. Decentralize analytics functions
    Even though progressives are more likely to decentralize their analytics functions, they still tend to respond in the middle range when asked about centralization. The end-state goal is to put powerful analytic tools into the hands of everyone who can benefit from them. But don’t underestimate the cost and difficulty of building the organization you’ll need to support this goal. Data-driven marketing needs more than just data and tools. Establish a center of excellence for marketing analytics (or incorporate it into an existing center) and arrange for distributed analysts — especially new hires — to train and participate in special projects to build a knowledge and tools repository and transfer this knowledge to their respective posts.

Gartner clients can read more in How Progressive Companies Manage Data Driven Marketing by Andrew Frank and Laura McLellan.

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