Written by Samantha Porter
The increasing collection and analysis of data for billions of individuals around the world has had notable effects on business, government and even social interactions. However, the emergence of the “big data market” has perhaps had the greatest impact on the marketing world. Product marketers are using unprecedented access to customer data to market in ways that are unique to each end-user, creating a more specialised and personal experience than many individuals ever thought possible with advertisements from large companies. Yet, with the rapid pace at which marketing is developing and being made available, many companies are still not fully utilising the wide array of tools now at their disposal.
One company that has been at the forefront of big data is Target. For decades, the retail giant has assigned each shopper a unique code known as their Guest ID number, which is used to collect as much data as possible on every person who regularly walks into one of its stores. “If you use a credit card or a coupon, or fill out a survey, or mail in a refund, or call the customer help line, or open an e-mail we've sent you or visit our website, we'll record it and link it to your Guest ID,” Target statistician Andrew Pole told The New York Times in February, 2012. “We want to know everything we can.”
A study from Duke University estimated that habits, rather than conscious decision-making, shape 45 per cent of the choices we make every day. These kinds of results have inspired the science of habit formation to become an increasingly popular and well-funded field of research in neurology and psychology departments at hundreds of major medical centres, universities and corporate labs. Today, almost every major retailer and service agency has a “predictive analytics” department devoted to understanding the personal habits of consumers in order to more efficiently market to them.
In the past few years, the growth of big data collection due to interest in unconscious consumer habits has only been exacerbated by the rapid expansion of social media. “For the first time since the internet became available, hundreds of millions of consumers are consistently congregating in a single place,”says Jeff Dachis, founder and CEO of social business measurement and management company Dachis Group. “At the same time, consumer behaviours are rapidly shifting toward an ever more permissive model of sharing and privacy.”
The Dachis Group uses a Social Business Index to measure social engagement of thousands of company brands through millions of social accounts, leading to records of 15 billion social signals a month. Advanced analytic techniques like natural language processing, semantic analysis, machine learning and cluster analysis make connections in social media that allow companies to not only understand the psychological processes of the consumer base, but sense how their marketing is impacting the views of their product by the desired customer base.
The scope and intricacy of information acquired by data collection in recent years has brought an unprecedented level of precision to the marketing world that is changing the nature of the field forever. As social media connects individuals with friends and family, it has also dramatically enhanced the ability of companies to focus their marketing in highly individualised ways. As increasing data allows companies to better understand consumer habits, the companies that utilize this information to create a more open, personalised relationship with their customers are likely to flourish, while those that continue with business as usual will be left behind in the 20th century.
Writer Samantha Porter has produced several pieces on marketing education and the value of an MBA in marketing. Today, however, she explores how big data, or the collection and analysis of billions of pieces of consumer data, is creating more specialized and individualized marketing campaigns. Included in this is the role of social media in this new direction of marketing, a topic recently covered by the Business Review Australia blog. Although social media has significantly impacted big data, its part in the evolution of marketing is not yet over.