The world of marketing is changing fast, pulling CMOs along with it. The change (and the pace it’s occurring at) means CMOs not willing or able to embrace digital disruption risk irrelevance. At Qrious we think change is a great thing – and with Data Powered Marketing we’re determined to help New Zealand marketers ride the crest of this opportunity wave.
Real time disruption
Digital disruption has altered the face of marketing – and put a spotlight on the role of the CMO. In the last two years alone, CMOs have lifted digital ad spend in New Zealand from around 20% of the market to well over 30%. At the same time, they’ve reduced marketing dollars through the traditional powerhouse of TV to less than 40%.
Globally there are no signs of this levelling off. Hot off the US press comesthis reportfrom the Interactive Advertising Bureau. In 2016 digital ad spend not only surpassed TV, but in a clear sign of a maturing channel, mobile surged past the “traditional” digital warhorse of search. By the end of 2016 total spend on digital advertising was up by 22% year on year, with mobile spend rocketing up by an impressive 77%.
Two things stand out when I read these numbers. CMOs are reacting well to the ongoing shift from traditional to digital channels, especially as this shift is predictable and has been largely expected. But the sheer pace of change is going to leave some CMOs exposed. Fuelled by mobile adoption and the rise of customer focused products and strategies, data is the new currency of marketing innovation. This shift is generating a tsunami of data. The effect of this is less winds of change, and more Force Ten hurricane. Standing front and centre of the maelstrom is the CMO.
The changing role of the CMO
To meet this challenge CMOs now require a fluency beyond the traditional skills. And that’s not just a challenge for smaller organisations – being a major enterprise level organisation doesn’t make you are immune. A few months ago Spark Digital’s marketing team asked us to assist them, as part of a series of projects designed to build a Smarter Spark. Spark Digital wanted to understand their customers better, with a clear focus on how they engaged with the organisation.
Using transactional data we grouped customers into macro segments, based on the nature and breadth of the relationship they have with Spark Digital. We then added more specific data, this time based on customer business information. This created a further thirteen micro-segments, based on elements such as business type (SME/small trader), diversity of location, flexibility of workforce and product range.
The end result was a bespoke Engagement Segmentation model, allowing Spark Digital to understand where their customers sit at a macro level, and providing a rich set of insights into how customers in these groups behave and interact with us. Spark Digital are now able to use this data to talk to their customers in a more effective and targeted way, as well as being able to target internal resources more effectively e.g. where could additional staff time be the most beneficial to our customers and where could thought leadership help build the relationship with some of our least engaged customers. The macro segments also provide a quick way to track the success of retain and engage activity.
And the next opportunity… Big Data
Which brings us to the elephant in the room. Earlier we spoke about the pace of change. That pace is already creating more data than was conceivable even a few years ago. In 2013 global market intelligence firm IDC predicted data would “explode” in volume from 4.4m zettabytes to a scarcely believable 44 zettabytes by 2025. Four years on, just as people were coming to terms with what this meant, the IDC confirmed they’d got that number wrong… they now believe data will hit 180 zettabytes by 2025.
This astonishing change is being driven by the accelerating penetration of devices and connected objects through everyday life. Google’s smart car alone generates around 1GB of data every second. All that data means one thing – CMOs who are not actively planning for the reality of Big Data, face just as much risk as those doing nothing.
Connected appliances, fully wired homes, driverless cars, devices like the Amazon Echo – and of course the growing willingness of enterprises to utilise massive anonymised data sets to help make better data driven outcomes, are all going to explode the data opportunity in the next few years. Gartner thinks the number of connected “things” will leap from around six billion in 2016 to almost twenty billion by 2020.
Big Data is where the CMO’s job is getting a lot harder, but also where the opportunity is getting a lot bigger. It’s also at the heart o Qrious, and a place where Data Powered Marketing is already in play, both in our private and public sector projects.
So how can you get started?
There’s one question I hear more than any other from CMOs wanting to get their data driven marketing journey rolling… just where do I start? The sheer daunting challenge of getting going can be scary, and if not scary, then just big. I always give the same advice – clearly identify the business challenge you want to address, make sure it’s clearly definable and measurable, and don’t try to launch with a big bang project. Instead start small, test your results, identify changes and optimisations, and once you feel comfortable with your results expand, evolve and iterate with larger scales.
Agile approaches to data projects, even those involving Big Data, can generate impressive results fast. Make sure your results are transmitted through the business, and that you have established the connections you need to support your work.
CMOs seen as taking this lead, adopting practices like agile (born out of software development), and transforming their value to the organisations are the ones taking advantage of the opportunity. By demystifying and creating genuine value from data, these leaders are creating change in their organisations and helping transform even legacy businesses into clever and smart data driven enterprises.