Gartner kicked off 2013 with a bold forecast: by 2017, CMOs will spend more on IT than their counterpart CIOs. At the heart of this projection is the widespread proliferation of Big Data; marketers are working with more robust (and, frustratingly, more disparate) data sets than ever before, so investing in tools to harness that information and more importantly, make it actionable, is of paramount importance to unlocking incremental business value.
Indeed, while Big Data is certainly exciting (what marketer will ever refuse more data?), the real opportunity for marketing disruption stems from Smart Data, the alchemical process that turns the haziness and inconsistency of diverse data sets into tangible business value.
Let’s talk about the implications of Smart Data for a publisher as an example.
The best marketers know that it’s typically more valuable to retain an existing subscriber than to acquire a new one. Excitingly, there are a myriad of ways to drive that retention. Key mechanics include converting more people who consume free content into paying subscribers and getting them to upgrade that much sooner. Additionally, driving ongoing reader engagement such as frequent visits/usage and mitigating the risk of disengagement or, even worse, subscriber churn are also critical. To optimize these mechanics, however, businesses need access to not just Big Data, but, rather, Smart Data.
Smart Data looks like a 360-degree profile (i.e. information from the entire business ecosystem – behavioral patterns, site experiences, feedback scores, social data, etc.) for each unique end user so that marketers can achieve situational understanding around key metrics — for instance, maybe a free reader is more likely to upgrade to a paid subscription if she likes sports or has the iPhone app. From there, actionable data can automatically deploy the right message — be it an email, a site prompt or a push notification — to address a particular opportunity or challenge to the right user at the right time. In the example of higher conversion from iPhone app users, the publisher could send targeted messages to download the iPhone app to those users who have browsed with an iPhone but who do not already have the app.
We like to call this “strategic personalization.” Yes, personalization will undoubtedly move the needle, but we’re well-aware that businesses are always protecting the bottom line and seeking out the tools to do so. Therefore, personalization must be somewhat strategic. In other words, why send a discount to a free subscriber in her first email if that user may have had a willingness to pay the full price? Think about the offline corollary – once you’ve seen yogurt on sale three times, are you likely to pay full price ever again? Predictive reporting can help companies understand the ideal time window for a paid subscription upgrade, and will typically only deploy incentives or discounts if the user is at risk for not transacting in that ideal threshold. This type of approach improves conversion while protecting willingness to pay as well as retention—those activated by discounts are almost always more likely to churn and, ultimately, margins and the bottom line.
Strategic personalization also allows for deeper reach into the editorial arsenal. With traditional editorial strategies, publishers can only promote a limited set of stories to their audiences through marketing messages like email. A truly 1:1 personalization approach, however, allows for content that, historically, may never have been “plugged” to get air time — and in front of the users most likely to consume it. Most importantly, this personalization is made in real time, ensuring no opportunity is lost.
It’s important for marketers to remember that customers are not segments, and, along these lines, the “batch and blast” approach to marketing is a dying breed. So it’s truly mission-critical for marketers to make investments in data and content that will fuel real relevance; Smart Data versus just Big Data. Similar realities exist for marketers of all shapes and sizes (there are particularly strong corollaries for retailers), but in all cases one thing is true: investments in data will help marketers better leverage their current assets.