Cover Story: Are You Ready for Big Data?
Direct marketers have been managing consumer data for decades. But as technology has increased the ways consumers interact with brands, marketers are confronting the prospect of "Big Data"—data sets that have grown so large and complex that they've become increasingly difficult to analyze, but offer greater rewards and competitive advantage for those who do.
"Big Data is a problem that many firms are facing today—data are just piling up everywhere," says Rio Longacre, a consultant at Capgemini Consulting in New York City. "The issue is, now that they have all this data, how do they combine it together, make sense out of it, and what do they do with it?"
Big Data can be overwhelming for marketers trying to understand just who their customers really are and when they are likely to purchase a particular product, says Tim Suther, chief marketing and strategy officer for the marketing and technology services firm Acxiom in Little Rock, Ark. It's a daunting task, and most organizations don't have a handle on it yet.
"A good portion of marketing is ineffective—of the nearly $500 billion spent on marketing worldwide, about $200 billion is suboptimally invested," Suther says. "We're helping organizations understand the impact of what they do on the ultimate measurement—did someone buy it or not?"
1. What's the first task for a marketer trying to leverage Big Data?
Answer: c. Determine the exact marketing questions that need to be answered by the data.
"The main advice for dealing with the Big Data problem: Companies need to envision what they want to get out of the information," Longacre says.
Mark Michaels, senior vice president of strategic development at the San Francisco Federal Credit Union, wants to know which of the credit union's members were sending money from their checking accounts to brokerages such as Charles Schwab so he can market the credit union's own investment products to those members. Michaels and his team also want to learn which customers are sending money monthly to mortgage services to offer them refinancing at lower rates.