20 years ago the world was changed by the Internet. It accelerated the knowledge access, it changed the way we communicate and create relations between each other and undisputedly – it changed the way we do business. And created a lot of new businesses.
Today we`re facing another big change and it is all about big data and analytics. It is capable of extracting benefits almost everywhere. Starting with coffee shops and restaurants, to professional sports and even modern advertising. Not just marketing but actual advertising. The question now is
How data analytics is going to change advertising?
Let us share with you that the change is already happening while you`re watching the Super Bowl brake comfortably seating on the couch. Or while you`re watching the presidential election advertorials. Or infomercial of new shocking weight loss solution.
Analytics helps to identify valuable advertising opportunities
New media outlet, unexplored timeframe, new creative, new target audience, new channel, just name it. Such task starts with careful data revision. Forbs are giving an interesting example with a chemical company which usually spends its local budgets regarding historical sales performance. It seems that on a nation-wide level the company had 20% market share but in some counties this number reached 60 percent while in others – as low as 10%, including locations whit fastest growing segments. This is what opportunity looks like.
Customer decision journey
We`ve discussed this a lot in terms of data analytics and since advertising is a key step of it, we can’t spare it at all. Like for instance a telecom company broadly advertising its best smart device offering on national TV. Usually, interested potential customers do a fast web search for in-depth information on the smart device. If the telecom company is not presented in the search results of the narrow range of relative keywords this is equal of missed sales opportunity or increased drop down of customer decision journey, lower ROI of advertising investment. And it can be worse – if some of the competitors have better search engine ranking for this specific product it means that you can drive sales for your competitor. Which is a big no-no!
Instant validation within digital domain and social media
Twitter and Snapchat are the instant social media of them all. Long before their existence, the usual way of advertising was to invest in creative, production and then media buying, hoping that everything will work just fine. Some of the businesses had budgets big enough for testing the advertisement among focus groups. Which is slow, expensive and often biased because of the fact there is no focus group which is just perfect. Right now, especially within the digital domain, you can briefly test any advertising inventory on the real field fast, cheap and almost under the radar. Social media channels are extremely viable option in this very direction since they offer the ability to put a couple or even more creatives into direct battle and to choose the most relevant.
Bring me more data
Living in a digital era means everything might be brought to a binary code. In a recent article in Harvard Business Review is stated that a large manufacturer of consumer electronics discovered with the help of data that id did not spend the advertising budget for newly launched products the most efficient way. It seems that TV ate up to 85% of the whole budget for a new product launch while YouTube ads – just 6%. Well, data analytics showed that the video sharing website is nearly twice as effective at prompting online searches that led to purchases. On top of this, it appeared that search ads making 4% of the entire budget are behind 25% of the sales.
Last but not least – timing. Usually, marketers plan periods in order to achieve saturation. Data analytics easily can state how long those periods should be for the different product groups, seasons, etc. Let’s add another variable – impressions or contacts. It is a common perception that an advertising campaign is capable of triggering the desired action after 3 or 4 contacts with a particular potential customer. Well, it depends on the type of business, offering, type of campaign, etc. By careful data preparation, modeling and analytics, campaign manager will know exactly how to plan expenditures in order to achieve maximum ROI.