- Category: February 2015 - Data Driven Marketing
Many studies already proved that Big Data in marketing is not a hype, but can have a significant impact on a company's success, such as the study "The Big potential of Big Data" by Forbes and RocketFuel. According to their findings, about three quarters of the companies that use big data activities for more than 50% of their marketing, increase revenue, ROI, customer satisfaction and the number of appropriate sales leads. Furthermore, 85% of the respondents could deepen insights about their users.
Individualized communication, based on relevant user Insights
However, data are required first to generate relevant user information, which are produced by the users at various digital touch points, such as transaction data from online shops and bonus systems, reaction data from email marketing campaigns or any other digital touch points.
By allocating data to a dedicated user profile, marketing relevant insights regarding individual user can be gained by using different analytical instruments – from scoring models to complex data mining processes: Where are the cross / up-selling potentials? What’s the willingness to pay? At what times and what kind of offer and communication the user can be activated the best? In which temporal and spatial contexts is the desired user behavior most distinctive? Etc. Based on these findings, the dialogue communication with each individual user can completely be personalized, which means that each user receives at each point of his customer lifecycle the content that matches exactly his current preferences: The right content at the right time in the right place.
Legal Big Data requires well-thought-out use of data management
As we know, individualized email marketing is subject to legal regulations. In many countries, it is necessary to receive an explicit consent (opt-in) of the user before collecting and analyzing the personal usage data - in addition to the user’s consent for receiving advertising, via the contact channel email. Even the merging of personal data from different sources into one profile, e.g. a newsletter and the online shop, is permitted only with the consent of the user. Therefore, Big Data is only important from an anonymous point of view. When personal information (master file or usage data) come into play, Legal Big Data is required.
Besides, it quite often isn’t considered that “Legal Big Data” does not end with legally compliant opt-in generation, but is rather a technical challenge as well due to the requirements for the collection and processing: The technology must be able to assign a different dedicated opt-in to each user profile; any form of opt-in has to be able to be activated and deactivated at user level; and for each user profiling measures can be carried out only on the basis of the specific agreement.
What sounds obvious and almost banal is extremely complex from a technical point of view. Many email marketing technologies do not allow such use of data management - often only on distributor level, but not for individual users. This means, either the entire distribution gets profiled or nobody at all. Users are pushed back and forth between different distributors, depending on the opt-in status, and often not even automatically.
Last but not least I want to mention that you can actually assume that just few users will comply with giving their consent to extensive profiling measures directly after their consent to email marketing. There is, on the contrary, even the risk that the data query makes them suspicious and they cancel the opt-in process. Gradual opt-up campaigns are therefore advisable at a later stage of the dialogue, once the user has already built enough trust.
By Daniela La Marca