It's hard to read a blog, pick up a magazine or have a conversation about business these days without the term "Big Data" coming up in some form or another. Like many buzzwords and industry terms before it, the term "Big Data" has many true and possibly untrue things attributed to it. Regardless of whether or not it can cure the common cold or leap tall buildings in a single bound, Big Data is here to stay.
According to Forrester, Big Data is the frontier of a firm's ability to store, process and access (SPA) all the data it needs to operate effectively, make decisions, reduce risks and serve customers. It is the product of companies and organizations trying to improve profits, products and customer satisfaction with the huge amount of information being generated every day.
According to IBM, we create about 2.5 quintillion bytes of data every day. This means in the last two years, we've created nine-tenths of the data that exists. This data comes from a variety of sources, including: finance, meteorology, GPS location signals, social media posts and more.
What this means is we are now faced with more data than we can reasonably manage with database management tools or more traditional data processing. While the size of the data set might vary, in 2012 the largest size that could be reasonably processed was in the exabytes.
We are also not just talking about the size of the data sets, while that certainly is a factor. There are three criteria that come into play and help us define something as Big Data:
- Volume, which we've already discussed, refers to the amount (in petabytes, exabytes, etc.) of information produced.
- Variety or how the different types of structured and unstructured data need to be processed and correlated.
- Velocity or how quickly data is produced that requires processing and analysis.
What Can You Do With It?
The thing to remember about Big Data is, whether or not we want it, it's there. People aren't going to stop tweeting, checking in on Foursquare, purchasing, commenting, and all the other behaviors and actions that contribute to this large amount and frequency of information being generated every minute.
Big Data helps us accomplish many things, both as marketers and in business in general. Many of these go well outside e-commerce and marketing, though several are interconnected. There are many ways that an organization can use Big Data, from risk analysis to product development or resource planning.
This is just the start, of course. As the information we store continues to grow, as new data sets become available, and as organizations become more sophisticated in sharing this information and its analysis, there will continue to be growth in the number of applications of Big Data.
As with any buzzword, there is a fair amount of misinformation among the chatter about Big Data. Here are a few things to remember:
- Big Data is not just about volume. It's easy to focus on the "Big" part of Big Data and think the term solely refers to the size of the data set. But remember, it's about more than that. As discussed previously, there are also variety and velocity to take into account.
- Big Data only has a few uses. Its uses go well beyond digital marketing, though that is one area that shows much promise in the years ahead. Big Data is currently being used in everything from meteorological analysis, to human genome analysis, to traffic pattern analysis and to risk analysis across enterprises.
- Big Data is a trend, not a thing. As James Green of Magnetic puts it, "Data is constantly being generated about what you've sold, what you've advertised, where people go and what they're doing. You can track everything down to an individual in ways that you were never able to before—but that doesn't mean that every single thing is worth tracking."
Big Data is here to stay, and its applications are diverse. The organizations that use it well will flourish, and those that don't will grow less competitive due to inefficiencies, lack of connection with their customers, lost opportunities without having real time adjustments, and decreased profitability.
How Does Big Data Relate to Digital Marketing?
A study performed in 2012 by Edgell Knowledge Network found while 80 percent of retailers are familiar with the term "Big Data," less than half, or 47 percent, say they understand how to apply it to their business. Gaurav Pant, who directed the Edgell study, says online retailers have an advantage over other industries when it comes to making use of Big Data. This is because of their ability to be nimble and make quick adjustments.
The data you are able to receive in abundant quantities include demographic, geographic, psychographic, behavioral and social information about your customers and potential customers. Figuring out how to capture, analyze and adjust based on analysis will possibly require some investments and changes in processes and infrastructure within both your marketing team and your organization. The insights you gain will give you a much clearer picture of your customers, their motivations and triggers, and their buying behaviors. What this all boils down to is relevance.
This new level of relevance means we can go well beyond personas and segments and create much more personalized experiences for our customers. There are almost no major retailers who do not have some sort of personalization or recommendation features within their online shopping experiences. Big Data means these features can become vastly more complex.
Despite what can sometimes be a significant initial investment for an infrastructure to support your Big Data needs, there is nearly endless potential for what a digital marketer can do with the insights that can be gained.
The insights you gain may be anything from help in adjusting your e-commerce platform in real time to an understanding about offline behavior. SCVNGR, the technology startup that created the LevelUp mobile payment app, found some interesting behavior based on weather. They found fewer customers left their houses to spend money when it rained. However, customers already in a coffee shop generally spent about 20 percent more while waiting out the storm. What did they do with this data? They pushed out special promotions at the onset of inclement weather in order to counter the lull in individual foot traffic.
How to Get Started
The first thing to remember about getting started with Big Data is just because something can be measured, it doesn't mean it's the most valuable information to you and your work. When you focus on the key performance indicators (KPIs) tied to the success of both your digital marketing work and your organization, it's hard to go wrong.
Because of the wealth of information out there, it's easy to get overwhelmed with the options you have at your disposal. It's important to focus your efforts and not just pull in every data source that is available simply because it is there.
By focusing on specific areas that assist in aligning your efforts directly with your KPIs, it will prevent you from wasting time and effort on the wrong things. This should be a good start to leveraging the power of Big Data for your marketing efforts.
The Right Tools For the Job
A quick search on Google will reveal many tools that you as a digital marketer can use to start taking advantage of Big Data insights. Rapleaf, Marketfish and many others provide services to marketers that leverage number crunching and analysis that larger enterprise solutions offer on a much more specialized and targeted basis. Pick a few areas that are directly tied to your KPIs and find solutions that fit.
Another place to get started is by talking with others in your organization. Perhaps they are using their own analysis tools for their respective roles within the company, and you can learn a thing or two from them?
The Future of Big Data
According to McKinsey & Company, the amount of digital information created annually will grow by a factor of 44 from 2009 to 2020, as all major forms of media—voice, TV, radio, print—complete the journey from analog to digital.
As a digital marketer, you will continue to hear about Big Data and the many products of the ecosystem that have popped up around it. Expect more predictive analytics, more third-party platforms that process data, and more job descriptions that involve data analysis.
Remember, Big Data is there to help you and your organization to produce better products, make more profit and create a better relationship with your customers. It is much more than simply having access to information. We are starting to see the beginning of a trend where Big Data analysts are in constant demand and this demand will probably not wane any time soon.
Big Data is and will continue to be critical to the growth and success of businesses. It will also become less expensive and time-intensive to solve some of the problems that only the very top companies are able to address right now. What will set successes apart from the failures will be what data companies focused on and how they apply the findings. When the collecting and processing of Big Data grows even across organizations, the true value will be in the analysis and application of the learning.