The Importance of Data for Digital Marketing
It began with a dream of a connected world - A space where we could all share in each other’s experiences and feel less alone. It was not long before this world became our matchmaker, instant fact-checker, personal edutainer, guardian of our minds and even our therapist.
As we went deeper and deeper into this world, the digital footprints and traces of ourselves that we left behind became a gold mine of data for what we now are coming to realise, is a trillion-dollar industry.
We are now the commodity. Yet, we are still so in love with this gift of free connectivity and no one ever bothers to read the terms and conditions.
This gold mine causes many to wonder if the microphone on our mobile device picks up on our conversations. But what’s happening is that our behaviours are being accurately predicted. So even the ads that seem as though they are eavesdropping on us are more likely to be evidence that the targeted campaigns are working, based on the behaviours that we have freely volunteered to be tracked by the industries that we are a part of in our daily lives.
All our interactions, credit card swipes, web searchers, locations, and our likes are all collected in real-time and attached to our identity. This gives any buyer direct access to our emotional pulse. Armed with this knowledge, they compete for your attention, feeding you a steady stream of content built for and seen only by you. This is true for every single one of us.
What you like, what you fear, what gets your attention, what your boundaries are and what it takes to cross them - everything is a filtered reality just for you.
This now brings us to the crux of our topic … The Importance of Data for Digital Marketing. The truth is that data is available everywhere and it is readily available in many formats. When it comes to digital marketing, however, it forms the basis of all planning, strategy, execution and reporting, amongst many other powerful uses that can be derived from it. Decision making today for many companies is heavily data-driven. In the past, however, businesses of all sorts relied only on what was in front of them and anything else was just speculation. Today, however, we cannot afford merely to speculate, because users vote online with their clicks, purchases, likes, opt-ins, followership and in many other ways. Even though they are not in front of us, they are speaking directly to us with the data they generate.
What this does is it provides businesses with unique opportunities to capture that data and make the best use of it. While it is true that some might not use the data for the greater good, the whole idea is to use data to customise experiences for individuals; To respond quickly to their feedback, needs, ideals, and wants. But for businesses to do so, they need to rely on users' behaviour and their interactions with the content that these businesses put out there.
So, the next question is, “How is data used in digital marketing?” Here are 3 fundamental ways in which data drives digital marketing.
- Targeting: The journey begins with a simple question of what are we selling and who is most likely to buy it – the audience? The product and price relationship here is not the important thing. But rather it boils down to what do we have to offer the marketing place. Once we have established the answer to that fundamental question, it is time to collect the relevant data. Google, Facebook, LinkedIn, Nielson Group and many other organisations have tons of data about our target audiences and therefore they are the first point of research that we gravitate towards in search of answers. This data gives us a starting point and information about the people whom we are trying to reach.
Acquisition: Once we have established who we are targeting, we need to determine how much it will cost us to acquire a customer. Again, this information is available on all of the big advertising platforms. It can be calculated, for example, by historical click data, competition levels or real-time information.
Cost: From here onwards, we can deterministically predict our overall budget for our campaign, and make adjustments to the campaign based on audience, industry, historical data and so on.
While this is a very elementary example of the use of data in the digital world, what's interesting about it is that the data collected was at no cost, and while not 100% accurate (nothing ever is with data), it does give the best predictive analytics and a good general sense of what our next move should be.
Now, it’s time to make the invisible, visible. This means using a dipstick and testing the waters to see how accurate our analytics predictions are. What’s also interesting at this point is that we have data analytics tools that track users and give us real-time information about the audience.
In conclusion, data has been said to be the next most valuable resource on the planet. More valuable than oil, so to speak. Why? Because data is everywhere. It is also worth noting that it isn't enough to know and understand that data is valuable. It's those who possess the analytical, statistical and abstract ability to work with numbers who will move the needle for organisations and industries.
While there are data tools out there, we have to understand that it is not about the wand (the tool) but the wizard (you). So, unless the numbers fall into the hands of those who have the technical know-how, data serves no purpose and all we can do is admire it from a distance.
The online marketing world is teeming with data and with it comes the responsibility to use it wisely. With the ever-increasing pace of artificial intelligence development, data may soon have a different complexion from what it does now.