"Big data" has become big news over the past year, having been credited with everything from predicting pregnancy due dates to winning the U.S. presidential election. And big data is beginning to have a large presence in marketing, though its full potential is yet to be seen.The Growth of Big Data
The term "big data" refers to the process of gathering and analyzing massive amounts of data--quantities of information so large that your typical database programs cannot handle the load. The amount of information in a big data application is measured not in gigabytes, but in terabytes or even petabytes.
Until recent years, such large quantities of data did not exist, and would have been very difficult to process. But along with advances in computer technology, there is now a huge amount of information constantly being gathered and stored. For example, the various servers and databases of the world contain information on every:
- Credit or debit card purchase.
- Social media profile, status update or check-in.
- Web page visit.
- Video rental, download or stream.
- Phone call, email or text.
And that is just a small sampling. Taken together, big data can be used to determine where and when you tend to eat lunch, what musicians or movie stars you are a fan of, who your closest friends are and where you are going for your next vacation.Big Data and Marketing
The power of big data is that it makes it possible to find correlations that might otherwise go unnoticed, and then use those correlations to predict behavior. If you know what someone likes or needs, and know when they are likely to want it, you can produce more effective and more welcome marketing efforts.
For example, one retailer was noted for using the big data of individual purchases to determine which customers we most likely to be pregnant. Since big data also told them what pregnant women tended to buy as their due date approached, they could target direct mailers to those women advertising the items they were likely to be looking for.Putting Big Data to Work for You
Big data has the potential to provide many different variations of the above theme. By using it correctly, you could:
- Reduce marketing costs. Big data can help you optimize your email marketing or direct mail campaigns by focusing on smaller, more targeted lists.
- Improve response rates. Because you are targeting the most likely prospects, or are reaching people when they are most likely to buy, you can greatly improve response rates and ROI.
- Improve customer satisfaction. People often find some marketing efforts, such as pop-up ads or telemarketing, to be annoyances. The big exception to this rule is when the person is currently looking for the product or service being offered. If big data helps you determine ahead of time whether someone will be interested, those same tactics can actually become welcomed services.
- Understand everything. Big data can provide insights as to why certain people buy or don't buy, and can help you identify and utilize personas in your marketing and customer interactions.
Big data also has its challenges. It is a field that is still under development, with mistakes to be made and learned from. Finding the right people to manage and process big data can also be difficult, and requires close collaboration with your IT department. If done right, though, big data can end up having a big impact on your bottom line.
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