06 Feb 12

Big Data

by Christina Tulloch, Trainee Econometrician

A key trend in recent years has been the rise of “big data”. This has generally benefited marketers, however, there are obstacles to be aware of.

The main benefit to marketers is that big data allows them to target communications more accurately. A crucial trend over the next few years will be a shift in emphasis from the average consumer to unique individuals. There are several ways to facilitate this:

- Web cookies: Analysing cookies to gain insight into what people are doing
- Customer Data: To increase understandings of customer behaviours
- Social networks: Used as an alternative to focus groups
- Using this data to track how these people are influencing others

These data sources allow marketers to get closer to the individual and then incorporate this information into communications.

However, there are some obstacles in the way. Because there is so much data from several different sources it can be difficult to mesh them together (particularly when they are telling different stories). Secondly, the regulatory environment could become a problem, particularly for web cookies. Lastly, with so much data it is crucial to capture interest internally – the data must be visually motivating to executives if insights are to be acted on. Lee Feinberg (Nokia) thought that there were huge benefits from transforming data – normally presented in spreadsheets – into interesting images using data visualisation. Feinberg said: "Many times, our data ends up as just numbers in reports, and that's not the way we can be most effective.”

The rise of “big data” has helped companies gain new consumer information and use this to optimise communications. It is however crucial to measure the effectiveness of these communications.  Econometrics (statistical modelling) is one way to do this. We first look at what has happened, use econometrics to find out why this has happened and then improve communication strategies using the output of these models.  This is only possible with the availability of "big data".