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CONTENTS Execu1ve Summary The good, the gaps and the barriers of Big Data Introduc1on What the Big and small of Big Data is all about The State of Play The perceived compe::ve playing field and where companies are posi:oned on the journey Success Factors Key influencers for leveraging success from Big Data ini:a:ves Barriers What companies need to invest in to overcome barriers holding Big Data back What it all means for Australian Marketers Guideline recommenda:ons for marketers moving forward on their Big Data journey 3 5 8 15 23 27 Page 2
EXECUTIVE SUMMARY: WHAT IS THE BIG AND SMALL OF BIG DATA FOR MARKETING There is plenty of discussion about the future of Big Data, with some commentators embracing the concept and others believing it may be a fad. Torque Data and Sweeney Research set out to understand how Big Data is really being received by Senior Australian Marketers, with surprising results. While it may once have been the thing that everyone talked about but nobody did, a small but significant number of Australian companies are driving significant business success as a result of Big Data programs. However, like others who discover a cri1cal advantage over their compe1tors, it s not something they are shou1ng from the roosops. What became apparent in the study is that word is star1ng to get out and many Australian marketers are being shaken from their complacency and are now acutely aware that Big Data is cri1cal to their long- term business success. For many Australian businesses there s a long way to go, but the journey certainly has begun. WHO PARTICIPATED IN THE STUDY 75 of the most senior marketers in Australia (CMOs, Marke1ng Directors, Heads of Marke1ng, etc.) 60% large companies (500+ staff), 40% small companies (<500 staff) Across 15+ industries: banking, telecommunica1ons, media, gambling, travel, retail, manufacturing, financial services, hospitality, etc. The study was conducted via in- depth interviews and online surveys. KEY FINDINGS The good It s happening: While many consider Big Data to s1ll be in its infancy in Australia, almost three quarters of senior Australian Marketers are using Big Data in some way. About 1 in 10 have integrated it as a core component in their marke1ng and are already driving significant results from their Big Data marke1ng programs. Some Australian companies even see their efforts as leading their global peers Size doesn t ma3er: There s very licle correla1on between size of company, marke1ng or IT budget and success of Big Data ini1a1ves. In many cases smaller companies are performing just as well as larger, becer- resourced organisa1ons. Good inten6ons: Australian marketers clearly understand the value of Big Data, with 78% of respondents saying that building a strong Big Data strategy will define their business for years to come. To achieve becer outcomes, 92% of respondents agree that Marke1ng & IT should work more closely when it comes to Big Data. Page 3
EXECUTIVE SUMMARY: WHAT IS THE BIG AND SMALL OF BIG DATA FOR MARKETING The gaps Wide chasm: The gap between the high achievers, the laggards and the complacent is significant. The majority of companies are either just gegng started or are not doing anything when it comes to Big Data, with 38% using it a licle, and 27% doing nothing at all. Only one in ten of Australia s senior marketers (8%) dismiss it as the next big fad. The benefit of foresight: While 72% of Australian marke1ng departments claim to be using Big Data, the vast majority are restric1ng their programs to historical repor1ng on past ac1vity and insights rather than predic1ve modelling and real- 1me analy1cs the high ROI Big Data ini1a1ves where true compe11ve advantage is realised. The barriers Barriers to growth: Despite 77% of respondents agreeing it is cri1cal for marketers to be crea1ve and have Big Data skills, in many instances this is currently not the case. 54% of Senior marketers don t feel their departments are equipped to implement programs effec1vely on either a technology or human resources level. The skills crisis: 69% of senior marketers say there is a real skills shortage already and 52% say lack of internal exper1se is the biggest barrier to greater Big Data usage. With 69% also predic1ng the number of employees in Big Data to increase, the skill gap is likely to intensify drama1cally. Page 4
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INTRODUCTION Much has been said and wricen about Big Data since the term or concept first emerged some 15 years ago and there is a lot of discussion about the future of Big Data how it will transform science, business and society in general. Some commentators embrace the concept wholeheartedly, others believe it may be a fad and just a buzzword that will come and go like many others. One thing absent from the public debate was an Australian Marketing perspec1ve. In 2014, Sweeney Research and Torque Data, together with the Associa1on for Data Driven Marke1ng and Adver1sing (ADMA) set out to understand how Big Data is really being received by marketers in Australia. The study sought to answer to numerous ques1ons including To what extent Australian marketers use Big Data What the key benefits and challenges are for Big Data in Australia How Big Data interacts with other marke1ng 'tools' at marketers disposal The study included interviews with 75 of the most senior Australian marketers through online surveys and a series of in-depth interviews. The Big and small of Big Data report outlines the outcomes from this first comprehensive study with the Australian Marke1ng community and is designed to clarify the various issues, myths and hypotheses about the state of play and the future of Big Data in this country. As to be expected, the rela1onship with, agtudes to and usage of Big Data varies across organisa1ons, but many common themes emerges and some results were a true eye- opener. Some significant threats to the future of Big Data emerged, but overall the findings suggest that the future is bright for Big Data in Australian Marke1ng. Page 6
WHO WE SPOKE TO This study was conducted with a good cross- sec1on of senior Australian marketers across different types and sites of companies - ranging from major global organisa1ons to Australian SME s. A snapshot of our sample is outlined below. 15 CMO s/ CEO s 9 Marke1ng Directors 10 Heads of Marke1ng And a range of similar job 1tles High profile players included 2 of the big 4 banks 2 of the leading telco s A leading media company 2 big TV broadcasters A major begng company A major interna1onal airline A popular food manufacturer Na1onal & interna1onal financ services companies large companies (500+ staff) A major news network A na1onal retail centre Some of the smaller companies we spoke to included A brewery Manufacturers Wholesale traders Small finance companies A hotel group A local radio sta1on Small companies (<500 staff) Page 7
WHAT IS BIG DATA? For the most part, Australian marketers define Big Data as large sets or collec1ons of structured and unstructured data that are too large to be handled by tradi1onal systems. While some defini1ons put forward were much more refined that others, what most had in common was a focus on the inputs rather than the benefits a Big Data capability can provide to marke1ng and organisa1ons. This may be partly driven by the term Big Data itself, but as some marketers alluded to, it s really about the outcomes that Big Data can help to create par1cularly its more sophis1cated applica1ons like predic1ve modelling and real- 1me analy1cs. Big Data uses advanced technology and analytics to create business value from large, often heterogeneous data sets. More specifically, Big Data is a term used generically to describe the capture, analysis and use of data to solve existing problems and create new solutions and services. Marketing Director, Information Systems & Telcoms Brand marketers are finally waking up to the reality of data driven marketing, leveraging digitally smart technologies to deliver relevant messages, accountability on performance beyond reach. Marketing Manager, Finance and Insurance I associate the term 'Big Data' with the '3 Vs' of data - Volume, Velocity and Variety. Which refers to the amount of data held by an organisation, how quickly the organisation receives, manages and uses data, as well as the type of data stored/used by the organisation. Direct Marketing Specialist, Financial Services The definition is within the term - Big Data is access to and use of large amounts of data (information), from various sources. The rise of technology is facilitating the generation of Big Data. CMO, Arts and Recreation Services To me Big Data is about being able to access all of your data points to give you a better sense of insight, but it has to start with what you re trying to achieve. CMO, Photographic company Using computing power to exploit data from multiple sources, to achieve insights not possible from standard data analysis CIO, Retail Trade Page 8
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IT S HAPPENING The majority of Australian marketers are already using Big Data in some form and clearly understand and appreciate the benefits. Marketers are acknowledging the importance of this new capability in terms of improving financial performance, building a direct rela1onship with the customers and providing a compe11ve advantage to other companies. It s happening 72% of Australian marke1ng departments are using Big Data 1 in 10 say it is a key component of how they do marke1ng Just under a quarter use it just as much as they use other tools It s not hype Only 8% Agree with the views that it is the next big fad Page 10
LEADERS, LAGGARDS AND COMPLACENT However, whilst most Australian marke1ng department are using Big Data capabili1es in some way, they vary significantly in their percep1ons of how far they have come on the Big Data journey rela1ve to their compe1tors. Like the adop1on of any new product, process or technology, there are those who lead the way and many that lag behind or who are complacent and not embracing Big Data at all. While the lacer believe that no- one is really using it, amongst the Laggards and Beginners, there is almost universal realisa1on that it s 1me to catch up. In a sign of how far some Australian marketers have come, a select few see themselves as global leaders in Big Data. Perceived Performance Relative to Other Companies 28% The Complacent Laggards Beginners Determined Achievers 21% 23% 17% 11% Trendsetters Are not using Big Data and many believe that compe1tors are in the same boat and as such that they are not behind The fear is that something BIG and BAD will happen, it is such a new thing and it will need to self- correct. An error or crisis will bring the BD conversa:on to a head. CMO, Tourism Company Using Big Data but behind the compe11on on all factors Whilst it is not a burning plalorm, there is a realisa:on that we need to catch up. CMO, Financial Services In training ahead of the compe11on on only a few factors 59% say it is cri:cal to implement Big Data in their businesses now so they don t get lej behind. Making inroads in Big Data ahead of the compe11on on most factors We have a strong strategy and vision and have appointed someone very confident about gedng the job done CMO, Retailer Believe they are ahead of the game on all Big Data factors 2% of marketers believe they are leading the way GLOBALLY across all measures! Behind Ahead Performance Relative to Other Companies Rated on the Following Factors Big Data strategy and vision Senior level (C level peers) support for Big Data Access to the right data Analy1cal exper1se Analy1cal tools (Hardware) Analy1cs tools (SoSware) Availability of funding for Big Data ini1a1ves Execu1on of ac1vity based on Big Data Measurement of impact of Big Data strategy Page 11
AUSTRALIAN MARKETERS ON A JOURNEY At present, many Big Data ini1a1ves are retrospec1ve in nature. They mine data to see what has happened in the past, for example they test the effec1veness of past marke1ng ac1vity, or they inves1gate exis1ng data to help provide insight into customers to help drive strategy development. High ROI capabili1es such as predic1ve modelling and real 1me analy1cs are currently underu1lised, but likely to gain momentum as Big Data exper1se and skills grow in Australian Marke1ng Departments. Average Share of Big Data Initiatives The plan is to merge the automated marketing platforms with propensity modelling which will ultimately improve customer service as they will be given what they want, when they want it whilst at the same time being respected and surprised. CMO, Financial Services We don t have the ability to apply analytical techniques over the volume of data that we need in real time Group Executive of Marketing, Financial Services Hindsight 33% Insight 32% Where most marketers are Foresight 21% Real-Time Analytics 11% Where the most value is Page 12
IT S JUST THE BEGINNING Whilst most of the marketers we spoke to are using Big Data in some way, all foresee growth on the volume of ini1a1ves. However, ini1a1ves are primarily targeted at acquisi1on and reten1on with licle focus on cross or up selling. The focus of ini1a1ves is likely to shis once marketers have achieved sa1sfactory trac1on with acquisi1on and reten1on strategies allowing for more 1me to be spent on developing cross and upselling ini1a1ves. We think too much about the initial acquisition but then don t do enough work to retain customers. CEO, Online Wine Company Share of Big Data Initiatives 42% 34% Acquisi6on Reten6on 24% Cross and Up Selling Read: On average, 42% of marke:ng ini:a:ves are targeted at Acquisi:on Page 13
IT S JUST THE BEGINNING There are a number of reasons why many Big Data programs are in the early stages of maturity or at the early stages of the journey. However, most fall into three categories Still learning how to use the data The Big Data imperative is moving fast and some organisations are having to play catch up, we are learning about how to harness the benefits of Big Data but are not there yet. CMO, Financial Services! Taking a cautious risk-averse approach There is a cautious approach to Big Data. We are a risk management business and other organisations have more scale so they can experiment and throw money at it to trial. CMO, Financial Services Using it for what they feel comfortable with, not currently equipped to do the sophisticated stuff Good at what has happened in the past, not good at looking forward need Big Data to assist in this process CMO, Tourism Company Page 14
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DEGREES OF SUCCESS Whilst the majority of marketers using Big Data have experienced at least some success in their ini1a1ves, there are a quarter that are s1ll struggling to reap the benefits of the capability. 2% actually don t know how effec1ve they are, likely as a result of not knowing how to measure success. 9% For us, it is really one of our biggest competitive advantages. It s incredibly valuable to this business CMO, Airline say they have been very successful On the other hand, a small number have been very successful and consider Big Data instrumental to their business achievements. Given the taste of success so far, these organisa1ons will con1nue to set the trends 66% have been at least a licle successful and push the boundaries within the Big Data space to stay ahead of the core and maintain a compe11ve advantage. 25% have been unsuccessful or unsure of their success in their Big Data ini1a1ves Page 16
SUCCESS FACTOR #1: ATTITUDE Australian Marketers are taking the emergence of Big Data very seriously and regard it as essen1al for sustained competitive advantage. In many companies, senior level decision makers are making sure it is a priority in the business 78% 82% say their ability to design and implement a strong Big Data strategy will define their business for years to come of Australian marketers say their marke1ng budget for Big Data will increase in the next two years 63% Expect Big Data usage to increase a fair amount or a lot in the next two years Senior level support is very high It gets discussed at every meeting we have. Marketing Director, Medical Aid Page 17
ATTITUDE It s exciting. If we can get to a place like Amazon using data responsibly to help viewers maximize their time by developing tailored viewing schedules for people for the one hour they can spend watching TV, this is the goal. If we can entertain them better individually by using data then this is fantastic. CMO, TV Network We have to look for other ways we can connect and engage with customers, and the reality is Big Data gives us the potential to have a conversation that is valid, sensible, and logical that can create a loyalty benefit. Marketing Director, Medical Aid From a market perspective it s really exciting so we re developing a range of solutions at the moment which will allow us to much more effectively utilize BD in a way that can provide genuine insight to the customer (usage patterns, staff behaviour) and differentiate ourselves in the market, so we re very excited about that CMO, Photography Company We have done a lot of work, but we are still in the formative stages. CMO, Financial Services For us, it s really one of our biggest competitive advantages we ve got a lot of history, so our customer data is probably our most valuable asset here. CMO, Airline Page 18
SUCCESS FACTOR #2: SIZE DOESN T MATTER Perhaps surprisingly to some, you don t have to be a large global corpora1on to successfully use and engage in Big Data. Smaller companies are engaging in Big Data ini1a1ves to a similar extent to large companies. In fact smaller companies report higher levels of usage than the bigger ones and somewhat greater success! In our experience, this is osen driven by simpler data systems, nimbler administra1on and a strong drive to establish compe11ve advantage. Large companies (500+ employees) Smaller companies (<500 employees) Big Data is very/ extremely important 67 % 58 % have to equal Use Big Data a lot/a fair amount 30 % 38 % Big Data does not Big Company or Big Budget or Big IT Infrastructure A li3le/very successful in Big Data ini6a6ves 71 % 79 % Page 19
SUCCESS FACTOR #3: CUSTOMER CENTRICITY Perhaps not surprisingly Australian marketers see the Marke1ng Department as the natural home of Big Data. They see themselves as custodians of the customer rela1onship and this translates directly into their vision for Big Data. say it is impera1ve that any Big Data ini1a1ve must create value for the customer not just the business It is seen as one of the most important functions by senior management right next to product in terms of the happiness of the customer (high quality product that gets to the right customers as a result of good data) CEO, Online Wine Company Serving up the right information to the right people at the right time data enables you to give people the right messages at the right time so that they feel engaged and that their loyalty to the brand is being rewarded. CMO, Airline 75% say it facilitates a long term rela1onship with the customer Our team has data on the best customers on hand and can make relevant offers when direct selling to them - this is a very personal relationship with the customer and the person on the phone and data will not replace this relationship CMO, Airline 75% say it helps with predic1ng customer needs The most effective use of Big Data in the future is being able to serve up content and product to customers that they want without them having to even ask CMO, Tourism Company 69% say it delivers one- to- one marke1ng It enables us to create a direct relationship with our customers it personalises their experience CMO, Retailer Page 20
CUSTOMER CENTRICITY It is almost universal for marketers to believe that the focus of Big Data ini1a1ves should be on the customer and ul1mately predict the customers needs and surprise them Ultimately, it can become the most powerful intelligence tool for the organisation to satisfy the customer. CMO, Financial Services Some marketers feel they are not quite driving customer service through Big Data just yet. Par1cularly in some industries, like FMCG, it is harder to target customer needs due to limited personal consumer data sources. Because of the indirectness of our product, it makes it impossible to have a conversation like the banks and telcos who can literally pick up the phone and have a conversation CMO, FMCG But most marketers hope to one day predict their customers needs and deliver relevant communica1ons or offers. One of the biggest challenges in the modern marke1ng landscape is to move from a product centric model of sales to one led by the customer. Big Data is perceived to have a pivotal role in changing that. We are still quite product led really using the data to inform the member conversation based on that particular member - I definitely think we re on a journey to getting better at that. CMO, Tourism Company Page 21
SUCCESS FACTOR #4: BEING EXPERIMENTAL Marketers are experimen1ng with Big Data. The majority accept that not all their ini1a1ves will result in a successful outcome. But they are s1ll determined to carry on with a test and learn approach to fine tune their ac1vi1es moving forward because of the opportuni1es Big Data presents it simply cannot be ignored. What we re finding with digital is that you re constantly having to invest and evolve. Marketing Director, Medical Aid It is a combination of experimentation, and a 70-20-10 approach broken up into percentages 10% for pure experimentation, 20% on scaling up things that seem to work, 70% on what we know works Group Executive of Marketing, Financial Services At its best, Big Data can help correct errors. Trial and fail will become more acceptable as it can bring out better learnings. CMO, Tourism Company This is a good culture here of trial and error, so we do some really shitty campaigns occasionally because we thought the data was more valuable than what it was or we went out to too many people with a message that just wasn t relevant and we got a lot of unsubscribes or whatever it is. But that becomes data in itself to feed back into the next experiment. CMO, Airline Page 22
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BARRIER #1: THE RIGHT PEOPLE It became clear that whilst the current in- house exper1se in Australian marke1ng departments is suitable for what is currently being done with Big Data in the business, it would not be sufficient for the future (and the future could be as soon as the next 6 months!) Investment in people who know how to work with Big Data and translate it into customer centric insights will be key for marke1ng departments moving forward. One of the key reasons companies are s1ll in the early stages of the Big Data life cycle is the apparent lack of internal exper1se on the topic. The right person running them is crucial. I think it s a certain type of person driven to data and data marketing because it s not that sexy, it s very nerdy marketing. So the right balance of people to add value CMO Airline 52% 69% say lack of internal exper1se is a key barrier to op1mising the success of Big Data agree there is a real shortage of talent and skills in Australia when it comes to Big Data In future we plan to better merge the historic data with what is available outside in the market and will subsequently be taking more people on internally to manage this process CMO, Online Wine Company Page 24
BARRIER #2: THE RIGHT DATA Marketers expressed frustra1ons and concerns about not having access to or making use of exis1ng data that would enable them to engage in more meaningful, larger scale Big Data ini1a1ves. There are also some marketers who expressed concerns of landing up in an analysis paralysis situa1on if the correct pieces of data were not correctly iden1fied, priori1sed and u1lised. 48% say that sourcing the right data is a barrier to using Big Data more We have lots of different data portals, sources of data and management systems nothing under one roof CMO, TV Network I think we haven t tapped the data sources for strategic potential enough. We re quite good tactically but getting more value out of the data to really unlock things. I think, we as a group need to better use the data. CMO, Airline Big Data needs to integrate with every other data function which makes it even more complex. Everything got more difficult when the media channels increased. Now there is data sitting on top which needs to be linked overall to the business strategy rather than just being there because it is fashionable. CMO, Financial Services Page 25
BARRIER #3: THE RIGHT TECHNOLOGY While the current in- house exper1se in Australian marke1ng departments is sufficient for the current, generally limited programs, it is an1cipated that within the next six months requirements will outgrow exis1ng capabili1es. 54% say they are not equipped to leverage the maximum value from Big Data 52% say the lack of the right tools is a key barrier to using Big Data more It s definitely an area that needs investment, technology wise CMO, Airline We ve done a lot of work, but we are still in the formative stages, we have a massive program of work inside this business to develop the capability to do all of these things. Group Executive of Marketing, Financial Services The challenge is that we have a very diverse range of businesses within the business all with their own data and the systems don t talk to each other. CMO, Financial Services It can be a little frustrating if you haven t got the right systems to support it. Internally, our biggest challenge at the moment is some of our systems are antiquated, so we re going through significant work to change the way in which we manage our business. CMO, Photographic Company Page 26
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EVOLUTION: CRAYONS TO CALCULATORS A marketer s job is osen seen as based on crea1ve flair and intui1on as well as tradi1onal marke1ng research. With the emergence of Big Data the role of the marketer is evolving to rely far more heavily on a variety of data for ini1al inspira1on and understanding, as well as the ability to create models that can predict the outcomes of marke1ng programs. In this study many senior marketers saw Big Data leading the vision rather than backing it up. As such it will be cri1cally important for today s marketers to become more au fait with Big Data to drive their business and their career forward. 77% The CMO, CEO and CIO are all learning new skills in this area. CMO, Financial Services say it is cri1cal for marketers to have both crea1vity and Big Data capabili1es The real winners moving forward will be the brand people who can sort through the masses of data and get the right insights and still maintain a degree of intuition and gutfeel Design Engineering combining analytics and intuition. CMO, FMCG We ve got 35 marketers here and a lot of them are data marketers and that s their history and they love it but if you come in and you re not, it can be overwhelming. And just working out how you can operationalize the use of (Big Data) can add value as a marketing strategist. CMO, Airline Page 28
EVOLUTION: CRAYONS TO CALCULATORS Big Data is perceived to be so important it will shape the marke1ng profession in the short, medium and long term. Senior Australian marketers foresee a strong demand for talent directly working in Big Data, but also a change required for anyone working in marke1ng in general. 69% predict the number of employees in Big Data will increase in the next two years I don t think in 5 years there will be a marketer out there who can t work with Big Data. Marketing Director, Medical Aid And will subsequently be taking more people on internally to manage this process CEO, Online Wine Company I think for us it s not a new phenomenon we ll just try to get better at it, more sophisticated at it and get the right people. CMO, Airline This will be one of the hottest talent areas in the broadened marketing world in the next 12 18 months CMO, Retailer I don t think any marketer under the age of 30 could do their job properly without actually coming from a data background. Digital is with us whether we like it or not, in marketing, and digital requires you to be analytical. Marketing Director, Medical Aid Page 29
START YOUR JOURNEY On your mark Go! Get started, test, learn and progress It s about people Focus on learning and development as recruitment of quality data scien1sts will become even more difficult as demand increases Engage IT Technology infrastructure is increasingly important. CMOs and CTOs need to engage and build accessible systems Look forward Repor1ng and analysis of past ac1vity is great, but only the beginning. Start looking now for ways to evolve your Big Data strategy towards foresight and real 1me analy1cs Just do it Any organisa1on with a strategy, a plan and some mo1vated and capable marketers can build and execute a Big Data Strategy. Page 30
Oliver Rees CEO Level 7, 153 Walker Street, North Sydney NSW 2060 t 02 9779 9836 f 02 9954 6611 m 0408 546 559 e oliver.rees@torque.com.au w torque.com.au t twicer.com/torquer Erik Heller MD, SYDNEY Level 1, 30-32 Market Street, Sydney NSW 2000 t 02 9262 3266 f 02 9262 5774 e erik.heller@sweeneyresearch.com.au w www.sweeneyresearch.com.au t twicer.com/sweeney_au Page 31