‘Data-driven’ is one of those terms which seems unnecessary for marketing. Surely all marketing uses data to some extent, so why does there need to be a distinction?
As marketing increasingly moves to digital platforms, however, the concepts behind the term ‘data-driven marketing’ have become distinguished from more traditional marketing and even have their own vocabulary.
Terms like programmatic buying, real-time bidding (RTB), data management platform (DMP), customer data platform (CDP), and attribution modeling are now standard lingo when talking about using data for marketing nowadays. Without some grasp of these terms and the concepts behind them, marketers can quickly become lost when speaking with others in the biz.
For readers who feel that they need to catch up in this area, Econsultancy has a number of blog posts on these topics and Econsultancy subscribers can consult our recent research covering programmatic, data-driven branding and the role of the CRM in data-driven marketing.
But for those who are familiar with these concepts, the next question is: where is it all headed? What changes should marketers anticipate in 2017 with regards to the technology, capabilities, and effectiveness of data-driven marketing?
To find out more on this topic, we interviewed an industry expert, Will Griffith from Oracle Marketing Cloud, who offers three big ideas about data-driven marketing in the video below, followed by some commentary on his points.
1. Platforms, technology, and data are improving
Using data to buy media and place creative can be frightening. It cedes control of ad buying, site choice, and audience targeting to an algorithm which may lead to both ad fraud and inappropriate placements, both of which may harm a brand.
These concerns are part of the reason why, as of late 2015, more than half (57%) brands have not yet implemented a DMP and most (61%) were not going to implement one in the coming year.
What may alter this trend, however, is that marketers are becoming increasingly aware of the data-driven platforms and technology that is available and realize that they are improving.
Facebook and Google are leading the way in making data available to advertisers. Programmatic ad-buyers on these and other demand-side platforms (DSPs) can now choose to pay by impression, click, action, download or a number of other different metrics. These platform and technology improvements then lead to better data about consumer interests which, in turn, make the platforms more valuable.
As Mr Griffith points out in the video, all of these improvements lead to new opportunities for brands who are able to devise new strategies which use the new technologies.
2. Marketers are increasingly using data to improve performance
Along with catering for new marketing strategies, the improvements in platforms, technology and data also help marketers understand what is and what is not working. This allows brands, as Mr Griffith points out, to understand what they are getting for their media spend as well as understanding how to improve the customer experience once people are on their site.
According to a recent Econsultancy survey, the two most popular methods for improving conversion rates derive from data, customer journey analysis and A/B testing.
Additionally, the most popular place for marketers to get ideas for what to test comes from analysing data.
This means that in order for their brands to remain competitive, marketers need to use data to both review the performance of their campaigns as well as guide changes to their marketing, customer journey, and digital properties.
3. Through combining first- and third-party data, marketers will be able to allocate budget more effectively
In the video, Mr Griffith alludes to the recent trend to combine first- and third-party customer data to improve marketing performance. While it sounds like a complicated strategy reserved for only those 43% of companies who have implemented a DMP, combining first- and third-party data is actually straightforward to do with the major advertising platforms.
Google offers a facility where marketers can upload customer data and then target both display and search ads based on both the uploaded (first-party) and Google (third-party) data.
Facebook offers similar capabilities and even lets you remove people from the list who do not meet your current targeting requirements.
Additionally, all major ad platforms, DMPs and DSPs offer retargeting capabilities which let marketers use onsite behavior, such as a product view, to determine what ad is shown to a potential customer. Combined with contextual, interest, and in-market consumer data from third-party data providers and consumer targeting can become very sophisticated, indeed.
Data-driven marketing has certainly come a long way from just measuring cost-per-click and bounce rates. Marketers now have a wide array of platforms, technology, and data sources to use which help them target the right consumers, improve marketing performance, and devise new strategies.
The task ahead for marketers is to become familiar with what is now available to them or risk losing out in the digital realm to brands who have a more informed approach to data-driven marketing.