Personalization

When some people hear the concept of personalization, they think immediately of sending e-mails or direct mail pieces that feature the prospect's name: “Dear Jimmy” or “Dear Suzy.” That can be a part of personalization, but it is a small part and often one of dubious value. For instance, if a marketer uses a prospect's name too soon in the nurturing process, the prospect may find the overly personal tone creepy.

For most marketers, personalization is about serving the right content at the right time to the right person—and doing it at scale. To achieve that goal consistently, data and the technology to process it are necessities.

Marisa Edmund, vice president of marketing and communications at Edmund Optics, shared how her company is using software from Qubit to personalize and optimize EdmundOptics.com. “If I have a thousand customers coming to my website every day,” Edmund said, “it's possible that each and every individual would see a different home page based on what they bought previously or what they liked or what they searched for on Google prior to coming to the site. If I have customers who always buy one product line, when they come back I'm going to show them that product line on the home page. Or if they search for prisms on Google, then they get to my home page, then they're going to see a lot more about prisms than they are about anything else.”

In addition to just showing the right content, Edmund Optics can spur a prospect to make a deal by offering, for example, 10 percent off on the product the prospect appears to be searching for.

“The days of everybody having one home page that everybody sees are pretty much gone,” Edmund said. Or at least they should be.

Tim Klausmeier, director of business intelligence at One Click Internet Ventures, takes a similar personalization approach at the Readers.com, SunglassWarehouse.com, and FelixandIris.com e-commerce websites he helps oversee. When One Click Internet Ventures launched these three sites, the focus was on search engine optimization and pay-per-click (PPC) techniques to drive raw traffic to the sites from prospects interested in buying eyewear. Recently, however, the company has shifted its focus to generating more repeat business from existing customers. This requires a personalization and a different user experience philosophy, Klausmeier said.

“Within the last year,” he said, “we've turned our attention more to customer experience—not only pushing aggressively for new customer growth but really monitoring repeat business and starting to build the more sophisticated lifetime value models. We're trying to understand what is getting customers to come back to our sites and what we can do within our business to really keep customers engaged with the brand.”

A key to repeat business is personalizing the websites and making buying from Readers.com or SunglassWarehouse.com as frictionless as possible. On Readers.com, personalizing the experience can be as simple as focusing on the magnifying power of the reading glasses the visitor has purchased before. “You want to know what's in stock for your power and you want the whole site to revolve around that,” Klausmeier said, adding, “Just continually giving that customer a more personalized experience, this is the next thing that we're really trying to zero in on.”

Additionally, in creating a recommendation engine for customers, One Click Internet Ventures is borrowing from the king of e-commerce, Amazon.com. “We've teamed with a company called Certona on product recommendations,” Klausmeier said. “We're sending recommendations based on click patterns in e-mails as well as on the site. You're seeing it with Amazon—customers are expecting a personalized experience and look for a site to put products in front of them that meet their needs. If a potential customer does not see what they want on your site right away, they are moving on to your competitor.”

Integrating Data Silos and Platforms

Marketers have data on prospects who have viewed their display ads, searched for their products on Google, opened their e-mails (or not), interacted with customer service, and purchased products via e-commerce. For most companies, however, the problem is that these databases remain separate and don't offer a 360-degree view of the customer. This disconnect hamstrings a marketer's capability to deliver the right message at the right time.

“It's combining the systems together in one place to give you the complete view of the customer,” Heather Zynczak, CMO of Domo, said. “That's where the nirvana is.”

Technologically, APIs and other tools are available to integrate these various systems. The main stumbling block for many companies is building the team and the processes capable of taking full advantage of the integration. Zynczak argues that the benefits are worth the effort, because incomplete data can lead to erroneous conclusions.

“You need data out of multiple places,” Zynczak said. “Otherwise, you don't get the complete picture, and you have to have a complete picture. Otherwise, you make decisions with limited information, and you make the wrong decisions. I think this is why we've been so successful. Not only do we use Google Analytics, we use SiteCat as well, Adobe's SiteCatalyst, so we understand the conversion rates; we understand the click-through rates. We understand the traffic that comes in. We understand which landing pages work. We understand the targets. We know all those things which are pretty normal, but we also incorporate budget information, so that we know how much we're spending and what our goals were on spending.”

As mobile continues its expansion, marketers must also integrate their data on customers and prospects on the desktop, on tablets, and on smartphones. “It's the same user whether they are on a desktop device, whether they are in social, whether they are looking at online video, whether they are running on a mobile smartphone or a tablet,” said Mark Zagorski, CEO of eXelate, “and the smart marketer wants to be able to carry on a conversation with the same consumer across all of those channels, knowing what the sequence of messages has been prior and being able to be consistent about the messaging as opposed to random offers in random places with random frequencies.”

One Click Internet Ventures' Klausmeier has attempted to integrate much of its customer data, and the company has used Domo dashboards to help facilitate this integration. One Click Internet Ventures has created a centralized database that unifies the company's PPC data, AdWords and Bing data, e-mail campaign data, and other interactions. At a very basic level, this system has simplified retrieving all the necessary data from a variety of databases. “It's so much easier to build out our monthly reports and track our metrics in real time with Domo. We no longer have to log in to multiple third parties to review our metrics; everything is just a click away,” Klausmeier said.

The centralized database and dashboard have also made it easier for One Click Internet Ventures to monitor its goal of increasing repeat customer transactions and revenue. “We built out an internal lifetime value model, allowing us to see repeat revenue from a customer each month after their initial purchase. We monitor what marketing channels and campaigns our repeat revenue comes from and use this information to improve our retention efforts,” Klausmeier said.

Marketing Measurement

Marketers can measure the impact of their programs better than was ever before possible. In the upper funnel, they can measure TV and display advertising's capability to drive more of their target audience to their corporate website. In the midfunnel, they can measure the impact of their nurturing programs and their ability to influence, engage, and educate prospects. And in the lower funnel, marketers can analyze the effects of search and e-mail and their ability to generate conversions, marketing qualified leads, and even revenue.

With the advanced attribution models that Adometry, Convertro, and VisualIQ have built, marketers can apply statistical models that allocate budgets efficiently across the entire funnel to make marketing spending more effective than ever before.

Vigilance about data allows marketers to use metrics to spend more on what's working and spend less on what's not. By embracing data, more marketers will be able to deftly maneuver their marketing, as Domo's Zynczak did with one program in particular:

“We ran a Google Ads display campaign where we thought it was amazing because we were getting really inexpensive top-of-the-funnel leads, and the conversion rate was through the roof,” Zynczak said. “Then we found two weeks later that our cost per opportunity—which typically has a high close rate—was massively going through the roof. It was because the top-of-the-funnel leads we were getting off Google Ads display, even though they were achieving conversions, were actually terrible quality. So within two weeks, I shut that campaign off. I rejiggered and put the funds elsewhere.”

Predictive Analytics

It's one thing to use data to analyze past behaviors. It's quite another to use data to predict future ones. More difficult still is using data to predict these future behaviors accurately.

A 2014 IBM study, “Stepping Up to the Challenge: CMO Insights from the Global C-Suite Study,” found that 94 percent of CMOs said they intended to use advanced predictive analytics in the next three to five years—the exact same percentage of CMOs that the same study found planned to boost their mobile capabilities.

Predictive lead scoring companies are thriving. The businesses of Lattice Engines, Mintigo, and Infer are all booming. Nick Panayi, director of global brand and digital marketing at Computer Sciences Corporation, said that dashboards are valuable, but the real value lies in anticipating, sooner and more accurately than your competitors, what your customers want and giving it to them. “When it comes to the executive level as well as marketing team at large, we want everyone to have a dashboard where all those things come together in the form of KPIs and how you do against those KPIs,” Panayi said. “It's very important to put it altogether. We use the technology called Good Data to do that, and where we're going to separate the good marketers from the great marketers will be determined by their ability to conduct predictive modeling. It's important to have dashboards, but dashboards are table stakes. They are what I call rearview mirror. What you do with that information in terms of predicting what comes next and helping your sales organization with that is what's going to be the keys to the kingdom going forward.”

Mobile

In three years' time, Facebook moved from generating virtually zero percent of its revenue to 59 percent of its revenue from mobile devices. Smartphones throw off massive amounts of data, from geolocation to data and app usage to web surfing habits. LinkedIn predicts that it will have its “mobile moment,” where greater than 50 percent of its global traffic will come from mobile, later in 2014. Mary Meeker at Kleiner Perkins Caufield & Byers, a highly successful Silicon Valley venture capital firm, recently noted in her “Internet Trends 2014” report that mobile now represents 25 percent of the global web usage.

So the world is now officially mobile. The challenge for marketers is to find the right messaging to reach users on smartphones with the small (but increasing) size of their screens, which provide a small canvas through which to reach consumers. Users say they don't want ads on their smartphones and find them annoying and disruptive, but they have said the same thing for marketing messages on radio, television, interstate highways, and the desktop Internet. Data-driven ads will come to mobile phones in great numbers; that's a certainty. The big long-term questions are what form will these marketing messages take, what technology will advertisers use to identify users, and how will this ID technology relate to the cookie and other digital identifiers?

Marketers are already finding that they must cater to mobile users even in the presence of still unwieldy methods for identifying users. Facebook, for instance, has taken a mobile-first design approach, said its CMO, Gary Briggs. All of the company's redesigns of its interface, for instance, must account for mobile as well as desktop. At the very least, other marketers have implemented responsive design so their websites automatically optimize for tablet and smartphone devices.

At One Click Internet Ventures, Tim Klausmeier says that his company is increasingly adapting its business model to mobile. “With reports we've been able to build out with Domo, we've seen how mobile and tablets have taken off on our sites,” he said. “Domo has also allowed us to chart mobile conversion rates and revenue growth, which has helped us make decisions on where to allocate development resources on our sites.”

Internet of Things

Advanced marketers are adapting to mobile. Some slower-moving marketers are still getting their desktop websites up to speed. They need to act fast, because a new, more expansive version of the Internet is coming soon. It's called the Internet of Things, and it will generate more data than the desktop Internet and mobile Internet combined.

The Internet of Things refers to Internet-enabled machines that generate their own data. Common examples are jet engines that inform mechanics about maintenance or performance issues, tractors that share data on fuel consumption and geolocation, and refrigerators that remind users when they're out of butter or milk. There will be more connected TVs, smart homes, smart cars, and smart factories. The Internet of Things represents a powerful opportunity for marketers to learn more about customers and how they're interacting with their products.

Cisco Systems estimates that 50 billion machines will be online by 2020, up from 13 billion in 2013. In a recent LinkedIn post, “Why Our Machines' Inner Lives Are the Key to the Next Economic Revolution,” General Electric CMO Beth Comstock said that this development is extraordinary. “For the first time in history, intelligence is spreading not only from person to person—it's spreading from human to machine, from machine to machine, and then back to humans,” she wrote. “This communication, through the Industrial Internet, is going to create enormous value and improve outcomes for industries from health care to aviation to power and beyond.”

The examples of how data from the Internet of Things is already being used run from the deadly serious to the comical. In Brazil, Kimberly-Clark has introduced Huggies with a sensor that alerts Mom and Dad—via a tweet—when their child has wet the diaper. The product is called TweetPee.

An InfoCommerce Group column lauded the position that Spiceworks has already staked out in the Internet of Things: “This company offers software that helps companies manage their computer networks—and everything connected to them. Spiceworks not only knows the make and model of every printer owned by hundreds of thousands of companies, it knows when they're running low on toner, and all in real time. Think of how many different ways you could monetize data like this!”

A McKinsey & Company report, “The Seven Habits of Highly Effective Digital Enterprises,” noted that U.S. Xpress, a transportation company, collects data from its fleet via in-vehicle sensors. The company found that it could save $20 million in annual fuel consumption by eliminating engine idling in its vehicles.

Wearables produced by companies like Fitbit, which track a user's exercise and eating habits, also generate huge amounts of data. Google, which has a wearable of its own in Google Glass, is investing heavily in the Internet of Things. It acquired Nest, which manufactures a smart thermostat, for $3.2 billion. Apple is also said to have an eye on developing a system for smart houses. There are early prototypes of potentially lifesaving sensor pills that, when swallowed, harmlessly attach to the stomach lining and can detect concentrations of medication in the body and e-mail doctors when a patient is missing a dose.

In addition to throwing off all of this data, the Internet of Things also provides a monetization opportunity via advertising. In a 2014 letter to the Securities and Exchange Commission, Google wrote, “We expect the definition of ‘mobile’ to continue to evolve as more and more ‘smart’ devices gain traction in the market. For example, a few years from now, we and other companies could be serving ads and other content on refrigerators, car dashboards, thermostats, glasses, and watches, to name just a few possibilities.”

Privacy and Security

Along with its possibilities, the Internet of Things adds another layer of complexity for digital security and privacy. A 2014 Spiceworks report, “The Devices Are Coming,” which surveyed more than 400 information technology (IT) executives, found that 45 percent of these executives identified security as a top challenge in storing data generated by devices.

Even though laws are already on the books that protect Internet users' privacy online and in digital databases controlled by both corporations and government, it appears likely that at some point in the future the United States Congress will pass additional legislation that addresses consumer privacy and information protection.

Ideally, this legislation will outline the responsibility of product developers to give consumers the capability to control and opt out of being tracked on the Internet without restricting the ability of marketing technology companies to develop new products that have the promise to reduce the number of wasteful and poorly targeted advertisements the consumers receive.

In addition to legislation that raises penalties for database breaches that expose consumer credit cards and other private information, corporations must take their responsibilities more seriously for staying one step ahead of the cyber criminals and protecting the sensitive and valuable information they have on their customers.

Product Development

The ways in which we use the window that data provides on customer behavior must be more than reactive. In the best cases it will be predictive. Analysis of customers' behavior—as they engage with software-as-a-service products or interact with products connected to the Internet—can also deliver insights that change the products offered by a company, or even change the company itself. Companies that are open to data and what it tells them must also be open to change to anticipate the changing needs of their customers.

Mark Zagorski from eXelate noted that product development is an area where companies can be big winners—if they listen carefully to the data.

“One of the things that always gets left out here is product, which I think you're going to see a much more aggressive movement and product differentiation and product development that will be influenced by big data,” Zagorski said. “What most people talk about when it comes to data is marketing and messaging, social media, and all these kind of things, but what you really start thinking is: how is this going to affect product development? Product development is going to move toward a much more real-time switch, in which we are not just positioning our product, but in a way we can actually create products based on the information that we're seeing in real time.”

Social Media

Social media promises to deliver rich data for marketers. For advertisers, it offers targeting opportunities, as target audiences on LinkedIn, Facebook, and Twitter have identified themselves and their interests in their profiles and in how they interact with their networks.

Social media also offers incredible amounts of both unstructured and structured data. With this data, marketers can, if they commit to doing so, respond to positive or negative comments in real time. They can address customer service issues, also in real time. And they can take special care of big-time social media influencers who have mentioned their brand, either positively or negatively.

Technology is appearing for both marketers and salespeople to mine the data available on social media networks and use it to their advantage. Sprinklr is software that is designed to create an infrastructure for enterprise companies to implement to take advantage of social media. With Sprinklr, marketers can build processes and tools for marketers to respond to tweets and posts in real time to head off customer complaints and amplify customer praise.

Nimble is another company that has built technology to help companies exploit the constant data flow of social media. In Nimble's case, the company has created its software to help small sales teams gain insight into their customers and prospects in real time.

Jon Ferrara, CEO of Nimble, says that they built Nimble to provide business professionals with the intelligence they need to connect with their clients in a more authentic and relevant way. Nimble is designed to review information from dozens of sources around the web, including Twitter, LinkedIn, Facebook, Google+, Instagram, and Foursquare, and collects public information into a resource that helps salespeople to be better prepared for sales calls, meetings, and interviews.

“Nimble,” Ferrara said, “automatically logs e-mail conversations and social connections, making it easy for you to set a stay-in-touch cycle. Follow-up is key to nurturing and maintaining great business relationships; that's why we give you Nimble to do all this for you and remind you when it is time to reconnect.”

Nimble has built a technology that integrates with e-mail to provide a broader picture of how a specific customer or prospect is behaving online. “Imagine if you had an app inside your inbox that provided a complete dossier and history of the person you're communicating with,” Ferrara said. “We built our Smart Contacts App to empower business professionals to use Nimble's intelligent insights everywhere and anywhere they work.”

What Nimble does for salespeople is track their prospects and customers wherever they appear online, including social media. These kinds of insights into what their targets are doing and saying online can be valuable for salespeople. “What we do is we bring in all of your most important signals—your e-mail, your calendar, your connections, your conversations, and all of your social signals—and then we layer intelligence on top of that,” Ferrara said. “We look at the fingerprint of people you've successfully done business with before and identify new people for you to connect with and engage with.”

Content Marketing

Content marketing might seem far from being a data-driven tactic, but it isn't. The most effective content marketing—whether it's blog posts, online videos, social media posts, or tweets—prompts your prospects to interact with your brand, long before they are willing to identify themselves. It also generates data that exposes where they are in the buying cycle.

In many industries prospects may interact with a brand or visit its website a couple dozen times—or even more—before they share their e-mail addresses. Up until that time, the content is painting a picture of your brand. It shows whether you're helpful, whether you're entertaining, and whether you're smart. All the while, the most effective content marketers are tracking with cookies or other technologies the anonymous prospects who read or watch or share the content. This tracking provides data on what content is working and, most important, what content leads to sales.

Content marketing is critical to data-driven marketers. It's why Bill Macaitis, former CMO of Zendesk, said that hiring a content team was his first step in building his data-driven marketing squad when he joined the company.

Your Industry Will Not Escape

Big data has already transformed numerous industries—retail, entertainment, media, telecommunications, and the stock exchanges, to name a few. Big data has even impacted what is often termed the oldest industry, agriculture, as farmers now use data to predict the weather, optimize irrigation, and sell their yield at the highest possible price.

Big data is also poised to impact jet engine maintenance, said Geoffrey Moore, author of Inside the Tornado. “General Electric is very interested in predictive maintenance for aircraft engines,” Moore said. “Rather than selling you an engine, General Electric would like to sell you flight miles, and then it will take care of everything. But in that kind of world, if you are going to make that promise, you have to have a huge big data back end that is continuously streaming information from the aircraft engines and maintenance depots.”

Moore says, however, that the industries where big data may have the largest impact in the near future are education, government, and health care. “All three of them lend themselves to the capabilities of big data,” he said. “All three have regulatory issues and privacy issues, but all three are in massive need of productivity improvement.”

The most effective uses of big data thrive on transparency. Moore makes the case that the current educational system is far too opaque. “We really don't know what happens once the teacher goes into the classroom,” he said.

The educational process, however, becomes more transparent once lessons take place on a computer. “If you put the educational lessons on an iPad, a lot of good things start to happen,” Moore said. “One of them is you can see how the students are progressing through any body of material by simply looking at how many tests they've passed. From a big data point of view, you can see how the students are performing.”

When the data indicates one approach is working better than another, education is using what amounts to A/B testing to boost the performance of both students and teachers. “You can automatically improve the quality of education simply by allowing students to vote up and vote down and teachers to vote up and vote down on various modules, interventions, and tests,” Moore said. “All of a sudden, what was entirely opaque is now very transparent.”

In the governmental arena, the National Security Agency's surveillance has clearly shown that a government agency can implement a large-scale program based on big data. Whether that program violates the Constitution is another matter, but government has also begun to use big data in less controversial ways.

“We are just seeing the early days of municipalities and government using big data,” Moore said. “For example, we just eliminated the toll takers on the Golden Gate Bridge with automated tolling. And what if we had smart highways that would know where the traffic stops and how to reroute around it? Los Angeles is starting to use big data algorithms essentially to manage traffic at scale as opposed to locally optimizing it for a few traffic lights.”

Health care may provide the most promising opportunity for big data's transformative powers. Deerwalk is one of many technology companies looking to use big data to remake the health care industry. Deerwalk has built a data platform that incorporates myriad data on patients for physicians and nurses to get immediate access to a patient's history. Patients also have access to the data on a web portal and can update information, such as their weight and fitness level, and report that back to their doctor. “The patient is seeing the same thing that the nurse is seeing,” said Bill Higgins, Deerwalk's COO. “It's all shared data.”

Deerwalk's platform incorporates data beyond what is available from claims data. “What has not been available to providers is the next level of information, biometric data: your height, your weight, your blood pressure, your LDLs [low-density lipoproteins], HDLs, triglycerides,” Higgins said. “The data has your actual values from the test rather than just ‘I had a blood test.’”

The ultimate goal is to deliver better outcomes to patients and lower costs to insurers. “Health care is being transformed because big data is allowing us to analyze this aggregated information that we've never been able to pull together before,” Higgins said.

Blue Health Intelligence is a health care technology company that resembles Deerwalk in its use of big data. Blue Health Intelligence collects and mines the medical and pharmacy claims data for multiple Blue Cross Blue Shield Plans. This is the largest healthcare claims database in the country with more than 140 million individuals nationwide, collected over nine years. And, Blue Health Intelligence has the ability to link these records with clinical and lifestyle data.

“The whole purpose is to collect health care data on a national level and then use it to inform better decision making,” said Swati Abbott, CEO of Blue Health Intelligence. “It works in two kinds of beneficial ways. One is reducing costs for the industry. The other is preventing a particular patient from getting worse or from getting sick in the first place if the data shows that they're more susceptible to a certain disease.”

Consumers are making more healthcare decisions and purchases and need transparency. “This is where data and analytics can help to take complex healthcare data and make it simple for consumers,” Abbott said.