How data is transforming digital marketing

Digital marketing has come a long way in the past decade, as we’ve moved beyond putting existing materials online and learned how to really harness the advantages of digital technologies.

The pace of change continues unabated, and among its most important drivers is data – and the meaning of that data.

Every one of us is going to be producing more data describing our use of digital products and services. This is what I like to call digital detritus. Detritus – discarded organic matter which is decomposed by microorganisms and reappropriated by animal and plant life – is interestingly analogous to our regard for, and treatment of, the data that we’re all shedding.

When it comes to the increase in data, we’re working on a logarithmic scale: we’re talking about hundreds and thousands of times more. Data in such quantities may well prove to have important new mathematical properties that are attractive to marketers, customer service and product development teams. Moreover, we don’t actually do much with the digital detritus today – it mostly resides in inaccessible log files, although the technology for collating it is becoming increasingly achievable and affordable.

What does this mean in everyday terms? We collect the click paths of visitors’ interactions with our website today, but we can’t yet access the data describing their use of most brown and white goods. We can invite customers to share their location data with us via their mobile phones, but we can’t yet help them review their driving style (Fiat’s EcoDrive facility excepted) or their use of public transport. We can encourage consumers to reap the anticipated advantages of greener products and services, but we can’t identify the actual advantage they achieve and reflect it back at them. We can market a food product’s expected role in a balanced diet, but not the specific role it plays in a particular household’s diet.

Data will increasingly help marketers close the loop for customers, which will potentially lead to enhanced loyalty. Data will also help customers test marketers’ claims and debunk those shown up as false or exaggerated.

This perspective on digital detritus is closely related to the ‘internet of things’. This term means exactly what it sounds like: a network of things not typically connected to the network at present. This includes for instance central heating, cars, lighting, power distribution, temperature and other environmental sensors, clothes and even fast-moving consumer goods packaging. These innovations are playing out right now.

The marketing ramifications of such an internet of things are manifold. With the potential to monitor every dishwashing machine remotely in real time, how might a company like Bosch Siemens design and market preventive maintenance benefits? How might that lay new foundations for a lifetime relationship with the customer? Using RFID tags to detect that a customer wearing clothes from Prada (and another wearing clothes from Primark) have just walked through the door, how might a retailer’s in-store marketing respond? And what impact might this information have on your pricing strategy?

The meaning of data
If Web 1.0 is about documents and e-commerce and Web 2.0 is about social community and user-generated content, then Web 3.0 revolves around the web itself understanding the meaning of community participation and content. This is the semantic web.

When you see the word orange online, for example, the computers that underpin the pre-semantic web simply see six alphanumeric characters in a row. They’re also very good at spotting when the same six characters appear in a row elsewhere. The semantic web, on the other hand, knows orange to be a colour, a fruit and a mobile telecommunications brand; but not only that, the semantic web knows which of these three meanings is intended in each and every instance, just as humans do.

Wikipedia is undergoing a semantic web transformation right now, an initiative known as DBpedia. The BBC and the UK government are already there with the bbc.co.uk and data.gov.uk websites, as is Tesco with some of its sites. Tests reveal that Google has already tweaked its PageRank algorithms to boost the rankings of semantically marked-up content over non-semantic content, constituting one serious reason for marketers to understand what is going on here.

Fascinating insight is achievable with today’s social web analytics services, particularly those that move beyond keyword analysis and try to overlay a semantic interpretation of the content they discover. Yet this overlay, typically dependent on algorithms developed from a field of computer science and linguistics known as natural language processing, does not achieve the analytical or computational power of a natively semantic Web. If you’re excited by your social analytics service to date, all I can say is that we’ve only just scratched the surface, and ‘getting more semantic’ appears to be an inevitable trend.

Social analytics, website analytics, CRM analytics, retail analytics and analytics related to the internet of things are most often treated as silos. The first marketers to tie them together, to begin to connect the data records in each database relating to the same stakeholder, will have an awesome advantage.

Will your organisation be one of them? Just as importantly, how will your analytics affect social norms? Will you impress your stakeholders by championing their ‘right’ to own ‘their’ data? Will you risk scaring stakeholders with your Orwellian powers, or will you take this opportunity to champion new approaches to stakeholder relationships?

However you look at it, one unquestionable trend is increased complexity. For the next few years, just knowing the right questions may well put you ahead of the pack.

Philip Sheldrake is founder of Influence Crowd and a board director at Intellect and 6UK. This article is an edited extract from his chapter on digital marketing for The Marketing Century, published by Wiley to mark the centenary of the Chartered Institute of Marketing. The book is available from the CIM at a special price of £12.50.