Marketing in the age of big data – what marketers should know
Marketing in the age of big data – what marketers should know
How can marketers keep pace with a demanding retail landscape where consumer desires and expectations are increasingly shaped by technology?
Think about the technology tools you were using just a few years ago. What could your phone, laptop, and apps allow you to do? Now think about what they can do today. Now imagine trying to promote and sell products and services into that whirlwind landscape. How do you keep pace with change and remain relevant to customers for whom technology is driving a desire for ever-better products and services?
We examine these issues with two faculty from Cambridge Judge Business School, Jaideep Prabhu and Shasha Lu, who both teach on the Business School’s MBA programme.
Designing digital experience around data
For Jaideep Prabhu, Professor of Marketing at Cambridge Judge Business School and a speaker at September’s conference, it’s important that marketers understand the complex landscape they are operating in:
“The big opportunities are for companies that have designed their digital experience around data to personalise and give customers exactly what they want, when and how they want it. This will increasingly make the difference between success and failure. Fast-growing digital giants like Uber and Airbnb are showing the way. Their business models are asset-light, nimble and smart. Amazon can sell books without holding stock or maintaining physical bookshops. The back-end is light, well-integrated and digital. This has immense power – these firms can bring data to the table, deliver value, generate revenue quickly, for large numbers at a low cost.
“At the same time, many companies which began in the analogue era are trying to straddle both the analogue and digital worlds and this brings big challenges. They have a lot of assets – stores, trucks, warehouses. They are not as digital-savvy as the Amazons that were set up to be purely digital. Digital-era companies have a very tight loop between data, marketing and delivery to customer – much tighter than those in the analogue world. Analogues now have to present a slick digital presence but they have to align this with their back-end operations. Often the customer’s digital experience jars with the real experience in-store. And so you can’t operate in silos anymore – you need cross-functional, nimble teams. All of this is much harder for analogue businesses.”
Working with data
So how does the marketer market into this disrupted space? For Prabhu it’s all about data:
“Marketers must be able to work skilfully with data. They increasingly need to do qualitative, anthropological research to gain deep insights into why people buy what they buy. But they also meanwhile have a massive and growing need for marketers, or roles within marketing teams, with excellent data analytical skills. Chief Marketing Officers (CMOs) need to know what is happening with AI, big data, the proliferation of digital channels and social media – they must really understand it all and understand it deeply.”
Another major challenge for CMOs, Prabhu suggests, is cyber security, as the recent Facebook controversy highlighted:
“Cyber security is huge for companies now. It’s a whole new area. CMOs must be aware of the issues and work closely with legal and IT teams. And cyber security is linked to globalisation pressures. Launch a new product globally and regulations governing that product will differ in different countries. Marketers need to be able to work effectively in markets both developing and developed.”
Skills a CMO will need to have on their team still include traditional business skills – MBAs and general management skills. “But general managers must be able to manage cross functional, diverse teams and fast-moving innovation. Marketers will need to be technologically knowledgeable around AI and big data so look to university computer science departments for people who are excellent data analysts. These departments will be an increasingly important resource for these skills.”
Dr Shasha Lu, University Lecturer in Marketing at Cambridge Judge Business School, spoke recently about the power of visual data at the 21st Century Marketing Conference, a one-day conference hosted by The Worshipful Company of Marketors, Cambridge Judge Business School and Fujitsu. Lu works intensively with startups gathering data on images and videos. Her unusual background in both traditional marketing and computer science led to her interest in using AI and machine learning to gain the kind of precise customer insights increasingly essential to modern marketing:
“My main interest is in artificial empathy and how we might teach machines to understand human’s internal states. Human beings have a natural ability to empathise with each other and use facial expressions, reactions and voice patterns to make inferences about each other’s internal state. Now we are trying to teach computer models and machines to understand human beings better – their affective and cognitive states – using the information they emit (visual, audio etc).”
Lu focuses on using visual data drawn from images and videos to gain insights for marketers:
“There is an increasing interest among marketers in multimedia data. This ‘unstructured data’ (e.g. image, video, audio and text) is leading the customer research trends. It has tremendous potential so marketing teams will need people who are skilled at mining useful information from these datasets. You’ve only got to look at social media sites to see how much people are interacting with each other using visual content – images and videos – and marketers must keep pace with what customers are doing.”
The “holy trinity”: automation, personalisation and optimisation
Content is still king and the basic marketing principles (the four P’s and the marketing mix) will still apply, but new tools are improving the effectiveness of content all the time – tools which automate, personalise and optimise it.
“These three will be the ‘holy trinity’ for marketers now and in the future,” says Lu. “AI is set to transform marketing, especially in terms of allowing personalisation and optimisation of marketing outputs. Marketers should be constantly reviewing their operational processes and strategies and checking them against evolving technologies to see where they need to catch up or improve. They can do this by seeking out the many start-up companies which are focusing on this kind of visual data mining – analysing the emotions of customers as they watch ads, for instance. Talk to these companies and link up with researchers. These are the areas where the cutting-edge work is being done and marketers would be well-advised to build networks within these. This will help you to think early about how the new technology coming along could alter customers’ behaviour and prepare your marketing to be ready for it.”
For Professor Prabhu the increasing sophistication of the technology customers have at their fingertips, and how marketers respond to this, will be the most crucial differentiator between business success and failure:
The power of the customer increases every day. They have immense choice and information at their fingertips and they expect excellent and immediate service. This puts huge pressure on companies and therefore on marketers. Marketing will become even more important but marketers will have to re-think what marketing means. You can no longer be a gifted amateur. You must update your skills and knowledge constantly to stay abreast of what quickly evolving technology is offering customers and therefore how businesses and their marketers need to respond.
Find out more
The 21st Century Marketing Conference was hosted at Cambridge Judge Business School on 7 September 2018.