The modern digital marketing industry simply couldn’t exist without the aggregation of huge amounts of data. That being said, the role that data plays in marketing has changed dramatically in the last few years. Some computer scientists are suggesting that many organizations that currently collect customer information will soon be unable to process the sheer amount of data they’re working with.
Unfortunately, that means some companies have been reduced to guessing as opposed to actually using their data in a wise fashion. This, combined with the recent announcement that major marketing firms are going to phase out the use of third-party cookies, promises to hurt the economic prospects of some companies while benefiting others.
Small business owners may be in the best position to adapt to these changes, which puts them in a rather unique position.
Using Metrics to Drive Customer Marketing
Some of the world’s largest firms have developed what marketers call vanity metrics, which sound impressive but don’t mean all that much. Ad agencies will often promote the fact that they have consistently met or exceeded the expected performance of some indicator without actually ever proving whether or not said indicator is all that important. By taking the time to identify the most important metrics for a given industry, smaller businesses can often outperform any company that relies on contrived measurements. Those that make changes based on hard numbers will usually adapt the best.
Larger companies that are heavily invested in AI-based technology also have to deal with some risks that younger firms might not have to. Artificial intelligence can generate regulatory problems as well, which can become a major issue for massive firms. Technologists were appalled, for instance, when one of Microsoft’s chatbots started to post offensive content. Firms in this position are often entrenched with their existing technology decisions and have to incur huge costs whenever these problems rear their ugly heads. Considering the increased focus on privacy by many consumers as well as the pending phaseout of many traditional online marketing tools, such as the abovementioned third-party tracking cookies, these costs are expected to grow.
On the other hand, startup firms are in a solid position to use metrics to drive direct consumer marketing campaigns. Instead of developing a product and then finding a market, designers are able to search through existing digital marketing analytic reports and find exactly who might buy a potential product and what problems it might solve for these potential clients. Engineering teams can then tailor their solutions directly to their desired market segment.
In fact, this seems to portend a greater cooperation between the development side of the equation and the marketing one.
Digital Marketing & The Coming Design Revolution
Marketers are playing a larger role in driving business than they ever have before. According to one report, 90 percent of respondents claim that their companies have shifted their priorities to focus more on marketing-led growth. It doesn’t look like skunkworks-style engineering projects are going to make a big comeback anytime soon. At the same time, 45 percent of people who responded to the study claimed that they were using data as often as they possibly could when making decisions.
As a result, many firms of all sizes are basing their design decisions around market needs. Companies can identify potential needs and provide solutions for them based solely on information that they or other firms have collected. When they create products and services using this paradigm, they often find that they have a built-in marketing campaign designed around them since they already know what sort of issues their customers are facing.
Manufacturing workflows are being altered at the same time. During the worst lockdown periods, many production workflows ground to a complete halt. That gave retailers time to compare information collected from sales sheets with hard numbers from the factories and warehouses that provide the goods they sell. In many cases, they found that customer demand could never actually be met by existing capacity. Data-based changes to the way that manufacturers produce goods are helping to ensure that customer demand is met in real-time.
Once again, it might very well be smaller companies that don’t broaden their scope too much who are in the best position to take advantage of opportunities ushered in by this trend.
Modifying Real-life Processes Based on Data
Startup companies have the unique advantage of not being entrenched in their existing manufacturing processes, thus they can make changes comparatively quickly. Established companies have larger stocks of data to draw insights from, but they often can’t make decisions as quickly. As more cross-channel research methods are put into play, the resulting information that they collect becomes more complex for firms that have an existing user-base. Optimizing individual channels can prove to be very challenging.
However, smaller companies that are able to align their processes and their data collection or retention workflows may find it simpler to build a data-driven culture throughout their entire organization. Due to advances in cloud computing and prepackaged software distributions, any firm could conceivably develop their own in-house method of processing information without requiring nearly anything in the way of on-premise hardware. Fabless manufacturers who previously weren’t able to put together massive digital marketing campaigns may suddenly find themselves in a great position to do so. It’s likely that many of these companies already use Hadoop-based Apache Spark packages in their existing workflows, which can help them to smooth out the transition to an open-source marketing environment.
Nevertheless, firms will have to look at the right indicators to see that they’re actually making decisions that make some sense in terms of real money. It’s still going to be important to gauge the return on investment of each campaign a company tries regardless of how much data is involved. Managers who consistently find themselves unable to set realistic goals might want to review how and why they use data in their organization.
Conversely, those who’ve historically had good success with data-driven marketing campaigns might soon find themselves rethinking their entire approach. With many of their favorite tools vanishing as a result of privacy and regulatory considerations, these marketers will want to come up with something that’s more in touch with the overall evolution of the industry as a whole.