Data analysis in marketing is well-established, but marketers today have access to a vast amount of proprietary and public data about customer behavior, usage and preferences, representing a potential gold mine of customer insight. The term “big data” increasingly refers to this explosion of data and the ability to use the insights from data to inform decision-making. Realizing the potential of big data presents numerous technical challenges, of course, but it also requires executive talent committed to implementing big data solutions and a team with analytic capabilities and a willingness to experiment.
A recent Spencer Stuart survey of 171 U.S.-based marketing executives found that marketers have widely embraced big data and are confident in their use of analytics techniques and tools. More than half of respondents characterized their marketing team’s use of data and analytics tools as proficient or better, with 11 percent rating their team as sophisticated or leading edge in their use of big data. Only 1 percent of respondents said their marketing team does not use big data analytics tools.
The survey of U.S.-based CMOs and senior marketing leaders across industries was conducted in conjunction with Spencer Stuart’s CMO Summit. Now in its 11th year, the CMO Summit is an annual gathering of top marketers to discuss the most timely business issues of the day. This year’s event explores the topic of big data and marketing leadership.
How Marketers are Using Big Data
Digital marketing via email, mobile, search engines and other Internet-connected electronic devices has become mainstream. The quantity and immediacy of the data generated from these marketing channels can provide insights to help marketers better target audiences, shape offers and marketing content, and make rapid adjustments to marketing campaigns. Indeed 58 percent of survey respondents said it is in those areas of digital marketing — search engine optimization (SEO) and marketing, email marketing and mobile — where big data is having the largest impact on their marketing programs today.
Other areas where data and analytics are having a significant impact on marketing include customer segmentation, marketing strategy, and loyalty and retention programs.
Over time, data and analytics will play an even more important role in overall marketing strategy, respondents said. Fifty-four percent said analytics will have the most impact on marketing strategy in the future. Respondents also expect that analytics will have increasing influence on product and service development.
The Limitations of Big Data for Marketing
Despite all of the promise, there are limits to the usefulness of big data analytics in its current state. The most significant of these, according to nearly one-third of respondents, is the complex “black box” nature of analytics techniques and tools, which can make it difficult to trust and understand the output of big data approaches and to convince others of the value and accuracy of the insights the tools produce. The difficulty of collecting and interpreting data also limits the ability of marketing organizations to more fully leverage big data.
Respondents noted other limitations on their ability to fully leverage big data, including: the sheer volume of data; the challenge of accurately scoping problems or opportunities and simplifying data into actionable insights; the lack of common metrics across all marketing touchpoints; and the need for big data techniques to be implemented and accepted “beyond marketing" to have marketing impact.
Beyond these limitations, marketers identified a number of hurdles to expanding their use of big data tools. The most common constraint, cited by 44 percent of respondents, was a lack of sufficient technology investment. Other significant challenges include: the lack of credible tools for measuring effectiveness; the inability of senior team members to leverage big data tools for decision-making; and the insufficient pool of data scientists and data analysts.
Leadership and Talent: What’s needed for big data
More than 60 percent of respondents indicated that their marketing teams do not have the right talent in place to leverage data and analytics. In addition to having leaders who are analytically savvy enough to understand the potential of big data and where to apply it, organizations need the data scientists able to extract meaningful insights from the data and the technologists able to build and incorporate new technologies. The demand for highly experienced analytics talent far outpaces the supply.
The survey also asked marketers how big data is likely to affect the required CMO skill-set. Two-thirds of respondents rated broad analytical thinking as a must-have capability for CMOs in a big data environment, followed by cross-functional influence and orchestration (44 percent). Other must-have capabilities and characteristics include: a customer-centric mindset; ability to build more diverse and technically astute teams; metrics-driven and adaptable. Interestingly, skills associated with digital marketing and big data — experience in social media and digital and deep statistical and analytics skills — were less likely to be seen as essential for the CMO.