Do you know anyone who still uses the newspaper to find a job?
I highly doubt it. Just as online job seeking (think Seek and LinkedIn) killed off traditional newspaper job ads, market research could suffer the same fate to Big Data.
So what is Big Data?
The Association for Data-driven Marketing and Advertising (ADMA, 2013) provide a marketing definition – “the collection, analysis and generation of insights from a wide variety of data sources in order to be able to improve business performance.”
Why the Big Hype?
In the past marketers lacked data to make marketing decisions so market research was required to fill the knowledge gap. Today we have an abundance of data from a range of sources to provide information on just about everything (and probably more). Consider this:
– Every 60 seconds –
695,000 status updates
11 million instant messages
698,445 Google searches
168 million+ emails sent
1,820TB of data created
217 new mobile web users
Source: ADMA, 2013
♦How could a market research survey ever provide as many marketing insights as the amount of intelligence available in these Big Data sources?
Marketing decisions, like most business decisions, should be based on facts. I question if traditional market research techniques can reliably obtain these facts when you compare to the potential of Big Data which can offer marketers a complete view of the customer.
Source: Salkowitz, 2014
Does Big Data analysis provide better marketing intelligence than traditional market research techniques?
Let’s take a look at a few.
1. Cluster analysis for segmentation – Big Data provides a greater quantity of data to identify segments for targeting than traditional market research surveys. The other advantage of Big Data over traditional market research techniques is the number of sources of data that can be integrated in order to identify clusters.
2. Focus groups for concept testing – Big Data can draw on a range of data sources to predict customer preferences for new products removing the need for numerous time consuming focus groups. Take Netflix as an example. Within 10 years Netflix went from a video rental company providing a mail-order DVD service to an original programming service providing on demand movies and TV shows to over 44 million paying customers. How did they do this? Netflix used their viewer records, ratings and comments to create an algorithm to predict what their customers would want to view next (Entrepreneurial Insights, 2014).
♦ How many focus groups would have been needed to obtain the same level of customer insights?
3. Surveys for assessing customer satisfaction –what good are these after the fact survey results if customers have already taken to social media to complain about a product or service? Big data allows for real-time tracking of customer feedback enabling the company to respond when it matters most to protect their brand and reputation. Consider this case study. Banco Bilbao Vizcaya Argentaria (BBVA), a global group that offers individuals and corporate customers a range of financial and non-financial products and services, was interested in knowing what existing customer think about it through social media. The bank implemented an automated solution to monitor and measure the impact of brand perception online.
“What is great about this solution is that it helps us to focus our actions on the most important topics of online discussions and immediately plan the correct and most suitable response.” – Online Communication Department, BBVA (IBM, 2014)
♦ Would a traditional customer satisfaction survey be as effective in understanding customer views as real-time feedback obtained through Big Data?
But is Big Data too hard?
Detractors will suggest big data is complex and too time consuming given the substantial volume of data that needs to be sifted through. Of course it’s not easy – if it was everyone would be doing it. But the data is not going anywhere. Companies who invest their time, energy and money into Big Data will certainly have a competitive advantage into the future.
In a July 2013 report, McKinsey Global Institute estimated that the application of Big Data practices could generate upward of $30 billion in additional revenue in the retail sector alone through productivity gains, improved transparency, and more sophisticated targeting of marketing, ads, and offers (McKinsey Global Institute, 2013).
♦ What company can afford to ignore this potential?
What do you think?
⇒Is Big Data a game changer for market research?
⇒Is traditional market research is dead?
Association for Data-driven Marketing and Advertising, 2013, Best Practice Guideline: Big Data, Sydney, Australia.
Entrepreneurial Insights, 2014, Big Data, Marketing, Best Uses of Big Data in Marketing, retrieved from http://www.entrepreneurial-insights.com/best-uses-big-data-marketing/
IBM, 2014, BBVA seamlessly monitors and improves its online reputation, Madrid, Spain.
McKinsey Global Institute, 2013, Game changers: Five opportunities for US growth and renewal, retrieved from http://www.mckinsey.com/~/media/McKinsey/dotcom/Insights/Growth/US%20game%20 changers/MGI_Game_changers_US_growth_and_renewal_Full _report.ashx
Salkowitz, R, 2014, From Big Data to Smart Data: Using data to drive personalized brand experiences.