Using Program Optimization to Make the Most of Big Data

By Feb 24, 2012

For marketers, the challenge is not to keep pace with consumers, but to catch up with them and the opportunity Big Data represents. There's a lot of work to do, with fewer resources, inefficient processes and homegrown solutions, and gaps in multichannel integration and marketing intelligence expertise.

More than ever before, marketers need a path to advanced customer engagement—a way to assess our ability to leverage data-driven programs and formulate a plan for maximizing performance. Program optimization is the place to start if you want to be a marketing player in the Big Data arena, and you must pass through data and testing to enter.

Data Availability and Audience Selection

An essential component to creating highly relevant customer engagement is—you guessed it—customer data. But the majority of marketers contend with inefficient warehouse storage and non-integrated systems for managing customer data, at a time when it is critical that customer data be timely, accessible, and rich with demographic, behavioral, and contact information. The data must be actionable because it is lush with customer insight and tuned for optimal campaign use.

Even if your customer data is accessible, how easy is it for you to parse through the volumes of information available to find the right audience? More than half of email marketers fail to perform any audience segmentation and targeting when they market. The approach you take towards audience segmentation and selection will go a long way towards determining your spot on the pathway to program optimization. For example, do you saturate your geographic audience with direct mail, or are you able to target the consumers most likely to respond to direct mail?

The more criteria by which you are able to target an audience, the more sophisticated your marketing efforts, and thus the further you are along the pathway to program optimization. As audience targeting becomes more advanced (e.g., customer value, behavioral response) campaign performance improves exponentially. For example, according to Forrester Research, targeted email campaigns generate a four times increase in monthly revenue when compared to non-targeted campaigns.

Testing and Metrics

From the start, any successful marketing methodology must start with a foundation of testing, measurement and analysis. This is the only way to make informed decisions regarding the continuous optimization of your marketing campaigns. The road to program optimization is partially defined by how many dimensions you are able to test the effectiveness of a campaign. For example, direct mail, email and display advertising are often tested against one dimension: audience. But it’s equally critical to understand the effectiveness of the promotion or offer as well as the message being delivered. Ideally, multivariate testing can help a sophisticated marketer determine campaign effectiveness across multiple dimensions for faster results.

How you are able to define and measure success is also a key factor in identifying your position on the program optimization pathway. Traditionally, marketing has been measured against incremental sales, which can be challenging. But the marketer’s role has expanded beyond sales to include responsibility for enhancing the online and offline customer experience—capturing, gauging and acting on the insights and possibilities of all that information, then entering the Big Data arena, armed to do battle for better customer relationships.

Arthur Sweetser (sweetsera@89degrees.com) is chief marketing officer at 89 Degrees.