January 29, 2015

Written by Emil Westrin


“We never, ever in the history of mankind have had access to so much information so quickly and so easily.”  (Vint Cerf, “father of the internet” quoted in Silva 2009)


Big data is the big thing in business today. We have all been told that big data will change our lives and revolutionize the way we do business. Marketers are no exception as marketing departments around the world are striving to implement big data into their routines. It is the word on everybody’s lips but do we actually know what we are talking about?


The purpose of this blog article is to demystify the concept of big data and to give marketers a better understanding how big data can be used in the planning, execution and analysis of marketing activities.


What is big data?

Every day, we create 2,5 quintillion of data on this earth. That is a staggering figure which can be exemplified by the fact that 90% of the data in the world today has been produced in the last two years alone (IBM, 2011). Big data has supposedly created big opportunities. The main idea for businesses is to exploit the growing mass of accessible information in large based on financial transactions or customer interactions to maximize business performance and create competitive advantages. (Purcell, 2013; Biesdorf et al, 2013) Collecting data to improve competitiveness is not a new phenomenon however; it has been around for decades. In the early nineties it was common for large corporations to build and take advantage of customer information systems. These systems were used to understand individual customers better and to develop and market new products based on the preferences of the consumers (Bessen, 1993).


Since the nineties we have experienced the digital revolution with the gradual shift towards digital products and information. This combined with innovations such as new databases and eventually clouds storage, has enabled companies to gather, store and analyze huge quantity of data much more efficiently. The result is a boom in data storage (Varadarajan & Yadav, 2009; Nunan & Di Domenico, 2013). Data is being stored, traded and used much like commodities today.  Some of the biggest corporations in the world are in the forefront of the data frenzy. Wal-Mart, the American retail giant handles and stores more than 1m customer transactions per hour, 40 billions photos had been uploaded to Facebook by 2010, and 48 hours of video is being uploaded to Youtube every minute (The Economist, 2010; Allocca, 2012).


What is the big deal?

So, with the vast amount if information easily accessible, it seems easy to reap the benefits in order to create competitive miracles.  Big data is a hot tech topic and is actively discussed in most business media today.  Some are giving movies like “Moneyball” or the books such as  “Freakenomics” part of the credit for the big data’s rise in popularity. Numbers and statistics have become somewhat “hip” again (NYtimes, 2012).


There are plenty of success stories and factors that point to an inevitable growth of big data usage. For example; 10-15 percent of organizations today are using big data in some capacity, and these companies outperform their competition by 20 percent (Scott, 2013). Greater willingness from consumers to share personal information online combined with the before mentioned technological advancements has increased the commercial value that can be added to organizations by using big data (Nunan & Di Domenico, 2013).  Another reason big data is celebrated it the way it empowers consumers as well. It has never before been so fast and easy to compare prices online as today (Sluis, 2014; Fulgoni, 2013).


Big data and marketing

Big data has created big opportunities for marketing departments all over the globe. The easy access to vast amount of information based on customer interactions has enabled marketers to go from knowing the customer as a demographic to understanding him or her as an individual (Sluis, 2014).  Bessen (1993) argues that successful marketing always has relied on a two-way information flow between the marketer and the customer. The marketers’ challenge has always been to collect detailed demographic and life-style information on consumers that can be used as a basis for effective and efficient activities. Today, it is easier than ever to establish the two-way information flow due to the Internet, social media and big data.  The challenge for many marketers today has moved from having too little information to having too much information coming from too many sources. The vast amount of data has turned marketers into insight hunters. Consequently, one of the greatest challenges for marketing departments is to create an information ecosystem by combining patterns of data from different sources (Prajicek, 2013).


Online giants such as Google and Facebook have made harnessing the data on the web into extremely lucrative businesses. Based on big data, Google and Facebook can now offer their clients tailored campaigns based on for example online searches, posts and messages. Marketers involved with Internet marketing know the potential reward of cost-efficient tools such as social media feeds, user videos and image posts etc. All the online tools have converged into massive dashboards that give marketers real-time and holistic views of the consumers and their ongoing activities (Smith, 2013). Marketers have been armed with advertising optimization capabilities overall, based on the growing amount of big data available to them (Fulgoni, 2013).


The challenges of big data for marketers

Prajicek (2013) criticizes many marketing departments for committing the “more is better”-fallacy. He argues that they seem to think that adding more sources of information will lead to better answers.  Having terabytes of data available but no one to successfully interpret the data is a major mistake.  And the fact is that many marketers lack skills that would enable them to use big data successfully (Vriens & Brazell, 2013; Ross, 2013). Another common mistake marketers commit is that they spend too much time “in the cloud” looking at macro trends. Great data and great insights are often wasted when big data is not being leveraged by little data and interpreted based on the integrations and relationships it’s based on (Ross, 2013; Fox & Do, 2013). Great data needs to be acted upon in order to create the potential competitive advantages.


Another challenge of big data stems from the established clash between marketing and sales. Big data can erode long-term marketing commitments in order to promote short-term sales. Fulgoni (2013) warns that a reliance on big data in a company has a tendency to cultivate a short-term decision making mindset. 


One of the main criticisms against the use of big data in marketing is the implication on individual privacy.  How much information on about consumers can big corporation store before it becomes an intrusion on private life?  There have been voices calling for ethical guidelines for the commercial use of big data, some actors have gone so far to call for self-imposed regulation in order to keep the consumers’ trust (Nunan & Di Domenico, 2013; Sluis, 2014; Cumbley & Church, 2013).


Key takeaways on big data for marketers

There are several reasons behind the rise of big data. The emergence of new technology such as more sophisticated databases and cloud technology has further pushed the boundaries of the digital revolution. Gathering, storing and analyzing of data has become more cost-efficient and organizations are not late to capitalize the potential benefits. This is proven by the statistic stating that the 10-15 percent of companies that are using big data are outperforming the competition by 20 percent.


The value of big data for marketing departments can best be explained by using the two-way information flow between the marketer and the customer, presented by Bessen (1993). Big data has enabled marketers to go from knowing the customer as a demographic to understanding them as an individual. The incredible depth of consumer information makes it possible for marketers to tailor their products, offers and activities to meet the expectation of a specific individual. Marketing with the use of big data will force marketers to attain certain skills in order to make use of the data. Marketers will chase insights by combining a mix of findings and data. Big data has started to provide marketers with real-time and holistic view of the consumers and their ongoing activities.


But marketers also need to acknowledge the challenges that come with using leveraging big data. The major question mark for the future is the implications on the consumer’s privacy.  Marketers with access to big data should strive to do ethically right and listen to common sense.




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