The cart before the horse

23 Apr 2012  |  Michael Bayler 
Michael Bayler

Michael Bayler, strategist and author, Bayler & Associates, on the misconceptions that are holding data back...

What's wrong with this picture?

I'm worried, you see. I'm hearing about Big Data. I'm hearing about targeting and relevance. I'm hearing about engagement.

I'm also hearing that those two poster children for the future of data-driven advertising, social and mobile, are punching far below their expected weight.

It was announced some weeks ago that UK mobile advertising had reached £203 million, surpassing cinema. It was also pointed out by the indispensable Monday Note that while Google's current ARPU is around $30 per annum, Facebook has apparently been achieving little more than $4. Even Yahoo! (remember them?) manages a decent $7.

What concerns me is not how disappointing these figures are. It's that, despite the fact that data is spoken of as central to the astronomical growth targets for both social and mobile advertising, not only is it not happening, but the wild assumption that "more is better" is playing out everywhere you look.

Consumers declare, when asked, that they'd really rather not be pursued by advertising in mobile. Their CTR's in social tell their own story. Why are we not hearing loud and clear what we're being told?

I'd like to challenge Big Data to a fight. I think it's a bully that needs standing up to. But like all bullies, maybe it's had a problem childhood and would benefit from a little understanding.

The blind alley of CRM

Evelyn Waugh, one of our finest authors, was a regular guest at The Ritz on Piccadilly. This of course was in an age when headwear for both men and women was de rigeur. Waugh was always quietly pleased when on his departure, the hat check clerk unfailingly selected the right hat from the many, and returned it to him with, one imagines, a small, proud flourish.

One day, having left the hotel, once again feeling the satisfaction of that flattering little gesture, Waugh noticed a mild discomfort in the scalp area. He moved his hat and on close inspection discovered, tucked into the band, a tiny piece of white card. On this card he read, in tiny print, the single word: "Florid".

I've loved that story for years, not just for the delicious shiver the denouement brings, but because it speaks volumes about the uneasy, still-undelivered promise of CRM.

Does it point the way for us to unpick the blind alley that unconsidered use of data has been leading us down? I think so.

The reason so much has been invested in relationship marketing with, let's face it, unsatisfactory ROI, is that far too many practitioners, very like the targeted adverting fanboys of today, make the critical mistake of assuming that data - in and of itself - creates value in the communication.

This is dangerous nonsense. Have we forgotten that while marketing is, at its core, concerned with the creation and delivery of value, advertising is about its communication?

CRM exists to help businesses capitalise on - and in certain very specific instances, build on - existing consumer value, not to create it. And, let's be entirely clear, data most certainly creates remarkable, sometimes transformational value in marketing.

When that value has been experienced and recognised by the consumer - as if you become part of the narrative of the relationship to date - subsequent opportunities to use consumer data for promotional and brand-building abound.

And there's an infinity of cases where, when the marketing horse is put back in front of the advertising cart, a happy consumer is more than willing to engage with further communications, offers and, in the best case, brand advocacy opportunities.

But the advertising cart categorically must follow the marketing horse.

The Big Question for Big Data

The so-called "fanbase vs database" debate (now that there's Facebook, do I need CRM at all) begs a rarely-asked, much bigger question. "Where, in fact, does data create value, and how should we thus invest?"

Let me share a small epiphany with you. Some years ago, I was working with one of many digital entertainment platforms. The founder was fond of saying, 'We're the FedEx of the online entertainment industry.' I was never comfortable with this vision, not least because I felt that what we called the "Postman Pat" problem, that of moving content from A to B, had long been solved. No, the value now lay beyond that challenge.

I thought, eventually, about Bloomberg. What its business comes down to is this: buying data, doing things to it - including blending it with other data - and then, most importantly, moving it to the point where it creates maximum value. In the case of Bloomberg, that point is a successful stock or share trade. I went back to the founder, and told him that we needed to be not the FedEx, but the Bloomberg, of online entertainment.

This, I believe, is the model we should consider adopting as we work out which data, of all the petabytes we have at our disposal, we should be investing in, in order to create real marketing and advertising value.

A successful transaction in our world is simply this: an encounter between brand and consumer that creates value on both sides. These are the building blocks of brand- and relationship-building in the connected world.

Of course, each brand has a wide variety of such encounters to identify, weigh up and prioritise. But when we've bottomed out the points at which mutual value is created, we can work out, crucially, what data we need (and where to get it) what needs doing to it, and the places it needs to be moved to, in order to support the shared value that all modern consumer brand marketing must be built on.

This process enables us to sweep perhaps 99% of the "dead data" we have to plough through right off the table, as irrelevant to value on either side.

Contrary to the received wisdom of stock-piling more data that we will ever need, then mining it for targeting opportunities, it's value itself we need to mine: then and only then can we understand the role and value of the data. And, thus, where and how much we should be investing.

So, a promising David perhaps - why not call it "Small Data" - to challenge the trajectory of a Goliath that clearly needs redirection, for digital marketing to achieve its enormous potential, and for digital advertising, in turn, to find its supporting role.

Michael Bayler will be speaking on one of the four panels at this year's Media Playground event. For more information and to book your ticket, click here.

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