Big Data s Big Step: Analytics Takes Center Stage

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1 Big Data s Big Step: Analytics Takes Center Stage for Marketers in 2014

2 Executive Summary The implementation of big data in marketing is evolving, and Infogroup Targeting Solutions (ITS) is keeping its finger on the pulse. In fall 2012, we conducted a survey at the DMA Annual Conference & Exhibition and found that the industry was drowning in a sea of customer data and struggling to make sense of it all. We discovered that many marketers were making strides in their ability to collect data but still learning how to analyze it and execute data-driven campaigns across multiple channels. A year later, we went back and surveyed almost 400 of the top marketers in the world at the DMA2013 Conference in Chicago. We compiled more insights on marketers goals, challenges, progress and actions when it comes to the question of what to do with big data. Based on the 2012 survey results, we said that 2013 would be the year when marketers turned information into intelligence by ramping up big data spending and hiring. They planned to invest in the technology and people that would help them understand their customers on a deeper level vowing to no longer be data-rich and insight-poor. The 2013 findings were well-matched. We discovered that while many marketers have successfully laid a strong foundation for effective strategies and are now starting to move on to a more sophisticated uses of big data, they must also understand that the investment and nurturing of these efforts must continue. This calls for great focus and resources in order to provide the maximum ROI. For more than half the respondents who said they have already started investing in big data, they are well into or past the initial data access phase. They have conquered the fundamentals such as data collection and cleansing, and many of them are already reporting early returns. Now they re tackling the second and third phases: insights and deployment. But there s another segment of marketers who haven t yet made substantial investments in big data and are still getting started. That group is taking the first steps and will be placing more of an emphasis on the basics. The DMA2013 survey looked at the following marketing trends headed into 2014: Attitudes toward the role of big data Plans for big data spending and hiring Level of investment in big data and expected ROI The biggest priorities and obstacles Big data is a multi-year investment that requires a deliberate implementation strategy and long-term outlook. Despite the challenges, our survey shows that optimism and expectations about the role of big data in marketing continue to run high heading into Big Data s Big Step: Executive Summary

3 Key Findings Attitudes Half of marketers (50 percent) are enthusiastic about the role of big data in marketing, and another 31 percent are cautiously optimistic. Only 14 percent are uncertain, while very few hold a negative view about big data s future. Budget Sixty-two percent of marketers said they expect their data-related expenditures to increase in 2014, a drop of 6 percent from last year. Only 4 percent said they expect their budget to decrease. Hiring The majority of marketers (57 percent) do not plan on hiring for data-related positions in 2014, a reversal from a year ago when 56 percent said they do plan on hiring. Of those who are hiring, 59 percent plan to bring on a data analyst or strategist. Investment Fifty-four percent of marketers have already started investing in big data solutions, while another 30 percent plan to start investing in the next two years. Eleven percent of marketers have no plans to invest in big data. ROI Thirty-nine percent of marketers are already seeing a positive return on investment from data-related expenditures. Many marketers expect to start seeing a positive ROI in the next year (23 percent) or two years (23 percent). Of those who have already started investing in big data marketing solutions, 61 percent are already seeing a positive ROI. Technology When it comes to specific big data investments, the most popular technology in 2014 will help marketers with enhanced analytics (42 percent), campaign management and integration tools (31 percent), and business intelligence (26 percent). Cross-channel campaigns Despite the growing emphasis on multi-channel marketing, 44 percent of marketers still execute data-driven campaigns separately within individual channels. About a third (30 percent) use a single integrated platform, while a quarter (26 percent) have limited integration across channels. Challenges Budget limitations (35 percent), lack of quality data (27 percent), and limited tools and technology (25 percent) are the biggest barriers to using big data to deliver multichannel marketing programs. Priorities Almost three-quarters of marketers (73 percent) say data analysis will be more of a priority in 2014, followed by data collection (66 percent) and personalization (58 percent). 2 Big Data s Big Step: Key Findings

4 Attitudes Early Adopters More Optimistic About the Role of Big Data 50% of marketers are enthusiastic about big data s role in the marketing industry 80% are more optimistic about their company s efforts than they were a year ago While some DMA2013 survey respondents acknowledged barriers to big data adoption ranging from limited budgets to fragmented systems, the majority of marketers retain a positive outlook on big data. Half of the marketers surveyed by ITS are enthusiastic about the role of big data in the marketing industry. Half of the marketers surveyed by ITS are enthusiastic about the role of big data in the marketing industry. How do you feel about the role of big data in the marketing industry? Enthusiastic Cautiously Optimistic Uncertain Tepid Disillusioned 31% 14% 3% 1% 50% 3 Big Data s Big Step: Attitudes

5 Whether an organization has already invested in big data has a dramatic impact on an individual marketer s outlook. Among those whose companies haven t yet taken the plunge, 22 percent are uncertain about big data s role in the marketing industry and only 39 percent are enthusiastic. Those who have already started investing in big data have few reservations 60 percent are enthusiastic and 30 percent are cautiously optimistic, and only 8 percent are uncertain. At a company level, respondents remained upbeat when asked about their organization s marketing efforts. Compared to last year, 80 percent of respondents were either more optimistic or somewhat more optimistic about their organization's marketing programs. The same pattern of optimism and uncertainty holds true among early adopters: 94 percent of big data early adopters range from optimistic to much more optimistic about their organization s chances for the coming year. Compared to last year, how optimistic are you about your organization s marketing efforts? Much More Optimistic 34% Somewhat More Optimistic 46% Somewhat Less Optimistic 5% Same 13% Much Less Optimistic 2% We estimate that reaching full productivity with big data could take as long as a decade for some companies. While most will be reaping the full rewards within five years, the industry is coming to a collective realization that big data implementation takes not only funding, but forethought. Coupled with the constant stream of media coverage and industry buzz about the topic, it s easy to see why those who have not yet invested are less enthusiastic than those who are on time or ahead of the curve. We estimate that reaching full productivity with big data could take as long as a decade for some companies. 4 Big Data s Big Step: Attitudes

6 Budget Big Data Spending Down Slightly 62% of marketers expect an increase in their data-related budget in 2014, down 6% from last year 29% expect their data expenditures to stay the same, up 6% from last year Heading into 2013, almost 70 percent of marketers said they expected data-related spending to increase in the year ahead. The spending spree will continue in 2014, with 62 percent of marketers saying their big data budgets will increase. The slight decline could be an indication that fewer marketers are budgeting for data solutions for the first time. The spending spree will continue in 2014, with 62 percent of marketers saying their big data budgets will increase. The survey also found that marketers who have already started investing in big data will continue to spend more and close to the same level as last year. 67 percent of marketers who have already made big data investments expect to see increased budgets this year, compared to 57 percent of marketers who haven t yet made investments. The same holds true for marketers already seeing returns on their investment: 66 percent of those already seeing ROI expect their budgets to increase in 2014, compared to 60 percent for those not seeing ROI yet. The modest differences suggest that marketers who have already started making big data investments are able to make a better case for allocating additional resources toward building out a more sophisticated strategy. 5 Big Data s Big Step: Budget

7 How do you expect your data-related marketing budget to change in 2014? Increase Greatly 17% Increase Slightly 45% Stay The Same 29% Decrease Slightly 3% Decrease Greatly 1% Have Not Determined 2014 Budget 5% When asked about barriers in implementing big data, 35 percent of respondents blamed the budget for lack of success in big data and multichannel utilization. Even marketers who expect their data-related spending to increase in 2014 are facing this challenge: 15 percent of marketers who expect their budget to increase greatly and 21 percent of marketers who expect their budgets to increase slightly cited budget limitations as an obstacle. A lack of funds often isn t the cause for failure to embrace technology and innovation. Rather, marketers concerns about budget could indicate that big data simply isn t a priority or that internal consensus hasn t been achieved. This could take the form of executive buy-in, as 15 percent of marketers acknowledged that big data isn t a company priority. 6 Big Data s Big Step: Budget

8 What barriers are preventing you from utilizing big data to deliver multichannel marketing programs? Budget Limitations 35% Lack of Quality Data 27% Limited Tools and Technology 25% Fragmented Systems 25% Skills and Hiring Gap 17% Not a Company Priority 15% Lack of Measurable ROI 11% No Limitations 11% Inability to Apply Insights 9% A December 2012 survey by SAS revealed similar results: 15 percent of mid-level data professionals cited lack of business support or lack of executive commitment as the reason big data adoption had stalled at their organization. In selling internal and external audiences on big data adoption, marketers should focus on the benefits of big data adoption rather than the technology itself. Tie big data benefits to overall organizational goals and use timelines to illustrate the implementation process and plot anticipated return on investment. Top 3 Barriers from Utilizing Big Data Budget Limitations Lack of Quality Data Limited Tools & Technology 7 Big Data s Big Step: Budget

9 Hiring Fewer Marketers Filling Data-Related Positions 57% of marketers do not plan on hiring this year for data-related positions 59% of marketers who are hiring will onboard data analysts The majority of marketers (57 percent) surveyed say they do not plan on hiring this year for data-related positions. That marks a shift from last year, when 56 percent of marketers said they planned on hiring. The move away from hiring comes at an inopportune time if marketers are serious about gaining insights using analysis, which requires people power. The good news is that among those who will be expanding their teams, the majority will be hiring a data analyst or strategist (59 percent). And among the DMA survey respondents who expect their budgets to increase greatly, 17 percent plan to hire a data manager and 12 percent plan to hire a data executive. Do you plan on hiring new employees to oversee your data efforts in 2014? If so, in which areas? I Do Not Plan on Hiring 57% Data Analyst / Strategist 25% Data Manager 10% Developer / Programmer 8% Data Collection 6% Data Engineer / Architect 5% Data Executive 5% 8 Big Data s Big Step: Hiring

10 This focus on analytics matches anticipated investment in analytics technology. When asked what technologies they plan on investing in for 2014, nearly half of respondents said advanced analytics. Tools designed for data collection (warehousing and cleansing) and deployment (real-time data tools and campaign management tools) trailed by comparison. Marketers who are eager to use newly implemented big data solutions may come up short in their search for experts. According to McKinsey and Company, the United States will face a shortage of 140,000 to 190,000 data analysts by 2018, as well as 1.5 million managers with the capability to effectively implement analyst insights. As with technology adoption, those who are seeking analysts early on in the process will fare better and avoid the expected shortage. According to McKinsey and Company, the United States will face a shortage of 140,000 to 190,000 data analysts by 2018, as well as 1.5 million managers with the capability to effectively implement analyst insights. Top 3 Data-Related Hiring Areas Data Analyst / Strategist Data Manager Limited Tools & Technology 9 Big Data s Big Step: Hiring

11 Investment Marketers Expect Quick Big Data ROI 54% of marketers have already invested in big data Among those early adopters, 61% are already seeing positive ROI More than half of marketers (54 percent) have already invested in big data solutions, a number that will rise to almost 90 percent in the next five years. When do you plan to start investing in big data marketing solutions? We Have Already Started 54% % Within 2 Years 15% 2-5 Years 5% More Than 5 Years 1% We Have No Plans 11% Among those who have already invested, 61 percent are already seeing ROI. Those who expect to invest this year also expect a prompt return: 62 percent plan to see a positive ROI in 2014 and 86 percent expect to see positive ROI in the first or second year. While this may be ambitious given the multi-year timeframe required to implement a comprehensive big data solution, the survey demonstrates marketers faith in big data s role in their strategies. 10 Big Data s Big Step: Investment

12 How soon do you expect to see a positive return on investment from data-related marketing expenditures? Already Happening 41% % Within 2 Years 24% 2-5 Years 7% More Than 5 Years 1% Never 0% Among those who have invested or plan to invest as mentioned previously, a company s stage in the big data adoption process also impacts when it will invest in different kinds of technology. The ITS survey shows that marketers who have already started investing in big data are more likely to be moving on to more sophisticated uses. For example, marketers who said they have already made big data investments are more likely to be spending money on more advanced solutions in 2014 such as campaign management and integration tools, automation, personalization, and real-time platforms. That indicates they have already mastered the basics and are moving onto more advanced big data strategies. What types of data technology do you expect to invest in for 2014? Enhanced Analysis 42% Campaign Management & Integration Tools 31% Business Intelligence 26% Data Cleansing Systems 24% Personalization Solutions 23% Automation Solutions 21% Data Warehousing 19% Real-Time Data Platforms 18% 11 Big Data s Big Step: Investment

13 Marketers are split when it comes to multichannel implementation, one of the main goals of big data adoption. Less than a third of marketers have the ability to run data-driven campaigns within multiple channels through a single platform. A quarter are running multichannel campaigns, but on a limited basis. The rest continue to run separate campaigns within each channel. How do you currently execute data-driven marketing campaigns across channels? Through a Single Integrated Platform 30% Separate Campaigns Winthin Each Channel 44% With Limited Integration Across Channels 26% While big data isn t necessarily a precursor to multichannel marketing, it supplies the insights necessary to reframe campaigns around an individual rather than the channel. A 2013 study from Yesmail Interactive and Gleanster revealed that marketers think their multichannel strategies are effective because they deploy campaigns via multiple channels. The true hallmark of a multichannel strategy, however, is having insights from one channel inform the other. By this definition, marketers haven t fully embraced multichannel: Only 46 percent of marketers actively leverage data from social media, direct mail and mobile to inform marketing communications to customers. Only 46 percent of marketers actively leverage data from social media, direct mail and mobile to inform marketing communications to customers. 12 Big Data s Big Step: Investment

14 Priorities Analytics Takes Center Stage 73% of marketers say data analysis will be more of a priority in 2014 Data collection remains a top priority for 66% of marketers Marketers are turning toward the ultimate uses of big data. While more than half of marketers said that data collection would be more of a priority in 2014, the majority (73 percent) said that data analytics would take center stage. In 2012, 38 percent of survey respondents indicated that they planned on improving data analysis in This indicates that the majority of marketers are caught between stages one and two of implementing big data data collection and analysis. They re also looking ahead to reaping the rewards: More than half said that cross-channel integration and personalization will matter more in the coming year two examples of deployment, the third phase of big data implementation. 13 Big Data s Big Step: Priorities

15 Will the following data initiatives be more or less of a priority in 2014 compared to 2013? More of a Priority Less of a Priority No Change N/A (Not pursuing) Data Collection Data Cleansing Data Analysis 66% 6% 22% 5% 50% 10% 29% 11% 73% 7% 15% 5% Data Application 44% 16% 30% 11% Cross-Channel Integration 57% 10% 20% 13% Real-Time Data Automation Personalization 46% 12% 29% 13% 48% 13% 27% 12% 58% 10% 23% 9% Data Privacy 41% 12% 35% 11% When it comes to priorities, the survey showed again that marketers who have already made investments in big data solutions are moving beyond the basics and focusing on more advanced strategies, with data analysis (85 percent), cross-channel integration (65 percent) and personalization (63 percent) being more of a priority than average. 14 Big Data s Big Step: Priorities

16 Recommendations In 2012, half of respondents at DMA said that analyzing or applying data would be their biggest data-related challenge in The challenge in implementing big data hasn t lessened, but the most successful marketers don t see big data as big or unmanageable. Rather, savvy marketers recognize that a big data strategy should be implemented over a period of years in three stages: data access (collection), data insights (analysis) and data deployment (platforms). Although the majority of marketers who have invested in big data claim they re already seeing positive ROI, the Infogroup Targeting Solutions survey results indicate that few marketers have moved on to the deployment stage, which includes the implementation of advanced tools such as multi-channel platforms and real-time data. Most are still in the collection or analysis stage or somewhere in between. While marketers have made great progress, they cannot stop with a few first steps. It s important that they develop an intentional plan to implement a big data strategy from start to finish. With that in mind, here are our recommendations for marketers based on the insight from the DMA2013 survey: View big data adoption as a process: Big data adoption isn t a goal in itself; rather, it s a means to an end a way to improve customer engagement, increase retention and loyalty, and optimize marketing performance over time. Adopting big data is a multi-year investment that requires planning, resources and patience to earn the ultimate payoff. Start now and be deliberate: Big data can t be tackled in a day; marketers must start small and be intentional about implementation. It s also clear that they should start as soon as possible or risk falling behind competitors who are already moving on to more advanced phases of implementation. Temper expectations about ROI: While many marketers say they are already seeing returns on their big data spending, a comprehensive multi-year investment strategy won t pay dividends right away. But hopefully those early returns will give marketers the patience they need to continue building out their strategies in the more difficult phases of analytics and deployment. Spend on people, not just technology: The most concerning survey finding is the number of marketers who plan on investing in analytics but don t plan on hiring for data-related positions. It s a critical misstep to overlook talent when trying to gain insights into big data. It takes people to make data meaningful, and not hiring the right employees or partners will cause an otherwise sound big data implementation plan to fail. 15 Big Data s Big Step: Recommendations

17 Methodology and About ITS Survey Methodology Infogroup Targeting Solutions surveyed 370 marketers at the 2013 Direct Marketing Association Annual Conference in Chicago. The survey was administered in-person on tablet devices on Oct About Infogroup Targeting Solutions Infogroup Targeting Solutions (ITS) helps companies increase sales and customer loyalty through analytically driven consumer and business data and database marketing solutions. With exclusive access to the Data Axle, we build multichannel solutions using contextually relevant information on 235MM individuals and 24MM businesses. For more information on Infogroup Targeting Data-Driven Services and Solutions: Call us at Visit 16 Big Data s Big Step: Methodology and About ITS

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