I am continuously experimenting with big data and learning the intricacies of how data can be used, utilized and integrated into the workflow of nearly any industry, task or project. Which is why I am intrigued by the ability to make slight changes to advertising strategies or content or even slight manipulations to an algorithm that ensure a business is achieving its business goals.

I am looking forward to sharing this fascination on May 28 when I and marketing author Bryan Heathman will be the featured guests for a University of Washington seminar. We will be discussing data-driven marketing with the Foster School of Business’ Master’s Degree candidates and Bryan will be sharing the experiences he’s learned through his work using big data for various marketing initiatives.

In anticipation of this opportunity to meet with the marketing innovators of the future, we put together the following Q&A to explore the role big data plays in marketing:

•  How do you define data-driven marketing and what makes it different from traditional marketing?
  • Ed Sarausad: Traditional marketing relies more on intuitive “gut feelings” to make decisions on price/product features/promotional initiative/placement choices. Data-driven marketing relies on statistical models (often from econometrics) to make decisions.
  • Bryan Heathman: Traditional marketing, meaning the analysis of historical data from a marketing initiative, often begins 15-60 days after the marketing event (trade show, syndicated ad, coupon drop, direct mailing, etc.). Managing business decisions from the rearview mirror is a thing of the past with up to the minute data-driven marketing tools.
• What is the key to success? Is it a KPI or is it something that’s intangible?
  • ES: Key is a data-driven culture, one that doesn’t ignore human intuition—but strikes the right balance of utilizing advanced metrics and data but also on checking that the numbers align with a humanized brand.
  • BH: The magic of data driven marketing is in creating visual simplicity with a sea of inbound data. Success comes from the ability to see results combined with subject matter expertise to interpret important mathematical correlations.
• How does the concept of “big data” factor into today’s marketing campaigns?
  • ES: Signals from social traffic and conversion require processing of high-volume, high-variety and high-velocity data. Turning these data into actionable outcomes for the campaigns is key. If you know a specific segment of customers (identifiable via Facebook demographics) respond well to specific promotional offer versus another, you can continuously feed that learning into the next promotion. Considering a promotional calendar with holidays and multi-cultural events, there’s a reason to have a promotion (Game of Chance, 2 for 1, or 50% off) every month and often times multiple times a month. The intelligent promoter will want to know what promotion to choose for the right segment at the right time. Often times, these offers are made in near real-time to prevent churning of customers.
  • BH: As more commerce moves to ecommerce channels, real-time data analytics of terabytes of data is moving the forefront of the marketing mix.
• What is possible today that wasn’t possible three years ago?
  • ES: Dealing with terabytes of data in real-time is now possible. Making it actionable with measurable business outcomes (marketing ROI) is the next wave.
  • BH: Real-time data analytics is now on the horizon for marketing departments of B2B and B2C companies. Imagine the power of real-time sales revenue data combined with advertising spend, to track the ROI of a marketing campaign.
• What will be possible three years from now that is not possible today?
  • ES: The future is about automating decisions based on real-time data collection. Businesses will be able to react to social, market or environmental signals with the best possible response, which real market data will enable.
  • BH: Moving real-time business decisions beyond the realm of ecommerce and into sales channels with traditionally slow reporting, such as warehouse clubs or 3^rd party parts distributors.
• What is the top skill for today’s students to refine before they enter the post-college world?
  • ES: Tying Statistics/Quantitative Methods to Strategy is the most important. We used to talk about “data telling the story”, but the truly convincing Quantitative Marketers tell the story with the data—armed with the know-how of the statistician or econometrician. For example, the results of a complex latent variable model can be summarized in an easy-to-understand infographic, which tells the marketer, “Oh, I’m talking to the wrong customer segment completely, or I’m sending them the wrong message at the wrong time.”
  • BH: Apply your knowledge from the classroom into the corporate world. Companies are hungry for students who bring a fresh perspective to the marketplace. Get an internship while you are studying, which will help give students perspective into post-college pursuits.
• What is one danger of data-driven marketing?
  • ES: Ignoring human intuition when the data is simply incomplete or appropriate to take business action. This happens when we haven’t accounted for everything in our prediction model.
  • BH: Improper programming/modeling in automated decision making can be detrimental to profits. Also, loose management oversight on complex programming can be equally dangerous.

We’re looking forward to sharing our experiences with the students at the University of Washington. We know that there’s a tremendous future for utilizing not only traditional KPIs in marketing initiatives, but by utilizing historical data sets, integrating algorithm approaches and the ability to make real-time decisions, there’s significant change underway for the marketing world.

By Ed Sarausad