Big data rewrites the CMO’s role

With the mass of customer insight available to brands adding another weapon to a chief marketer’s arsenal, David Burrows asks whether their job titles should reflect this.

BT

If you believe the surveys, the pressure to improve the return on the money invested in campaigns has combined with an explosion of data to squeeze creativity from the role of chief marketing officer and turn it into ‘chief data and marketing officer’.

“The success of my role is far more about analytics and technology than it is about hanging out with my ad agency, coming up with great creative campaigns. We must increase campaign ROI.”

That comment, from a marketer in the airline industry, was made to IBM during its research of chief marketers and their attitudes to data. Its statistics reveal that 71 per cent feel ill equipped to deal with data coming at them from all directions.

Caroline Taylor, vice-president of marketing and communications for IBM in the UK, was involved in some of the interviews for the survey and isn’t shocked that most CMOs struggle with data.

“I wasn’t surprised by what people were saying, or the findings, because it resonated with me. But the ability to manage data, optimise it and use it intelligently is critical. In some industries, I can see it being used to enable a business to lean more heavily on marketing.”

This view is echoed by Nilan Peiris, chief technology and marketing officer at Holiday Extras, who sees an emerging role for the ‘performance marketer’, someone able to use data for growth (see Case Study, below).

The challenge for senior marketers, therefore, is how to mine the data without drowning in it, and then to use the insight to get close to the customer without “spooking” them.

BT Global Services (BTGS) has taken what vice-president for marketing Neil Blakesley calls “a funnel approach” to aggregate data from a variety of sources. The process starts at the macro level – the size of the market and what is addressable in that – and ends at the very personal level - the propensity of individuals in a company to buy from BT, what power they have and what BT knows about them.

Blakesley explains: “We’ve looked up into the cloud at all the data and [decided] what, in reality, are the bits we need to know in order to benefit our clients. The only way we can serve our customers better is to know them better.”

So, what’s the reaction of customers when they realise BTGS knows so much about them? “At first, they’re shocked,” says Blakesley. “Then they’re impressed. And then, when we show them the data we have about their organisation, they can’t help but self-correct it.”

As a result, BTGS gets further insight on “who to make friends with”. The system is all about helping the sales team focus on the customer needs.

As Blakesley puts it: “We decided to spend our marketing dollars on the customer rather than the billboard. For companies that are selling to very large organisations, the more you know about your customer, the better.”

But what about the man on the street? The rise of direct-to-consumer business models and the opportunities to monitor, track and communicate via social media has seen more and more brands collect more consumer data across their markets, products and channels.

This, inevitably, has raised concerns over privacy. According to a study by McCann Worldgroup, consumers are more worried about the erosion of personal privacy than terrorism or climate change.

Alison Lancaster, chief marketing officer at Kiddicare, says: “With the data coming from social media now, it’s like running 24/7 focus groups.

“It can be spooky for a customer if you use too much of the knowledge you have to over-personalise. The goal is to get close, but not too close. As a CMO, you have to be incredibly mindful and respectful in terms of how you mine the data and how you use it.”

honda

Honda are developing a roadmap to help it focus on the vital mission of creating one-to-one relationships

Lancaster says CMOs don’t need to understand all the technology behind the data, but they do need to understand its value to their business. “A roadmap is essential,” she adds.

“You want to get towards a single view of the customer, but if you are asking for data, you need to know what you are going to do with it and how you’ll use it to serve the customer. Otherwise you can be paralysed by too much of it.”

‘Analysis paralysis’ is a common concern among CMOs. Martin Moll, head of marketing at Honda UK, says: “It’s all very well to have all your data in one place, but you need to do something with it. We have hundreds of millions of rows of data going back to 1998. But because there hasn’t been a structured approach to insight until recently, in many ways we’re starting from scratch.”

He adds that Honda is developing a roadmap to help it focus on one-to-one relationships, part of its five-year marketing plan. This starts with a data mining and insight exercise, but will then move on to gap analysis and “an understanding of what systems, processes and additional data sources we need to put our vision in place”.

“The key focus for us is having a purpose in mind. Without that, you fall into the trap of continuing to amass data without actually using the asset in any meaningful way,” he says.

So is this “journey” through big data really creating chief data marketing officers? Daniel Dunleavy, a customer analytics specialist at Deloitte, says it is wrong to think that the modern CMO is led by creative, given that those in data-rich organisations like telecommunications and retail banking are being joined on the data bandwagon by those with a less direct-to-customer model.

“To meet the demands of an increasingly informed and fickle consumer, perhaps a ‘chief customer officer’ representing marketing, sales, and service is the answer rather than a chief data and marketing officer,” he says.

Many chief marketers see data as a means of backing up gut instinct on the big decisions. “There are still plenty of CMOs using a gut feeling or experience to come to a conclusion on the right thing to do,” says IBM’s Taylor. “But most of us will look at the data to confirm this is the way to go. We are measured on return on investment, so we can’t afford to make mistakes.”

Javier Diez-Aguirre, Ricoh’s director of corporate communications and most senior EMEA marketer at the company, says: “The question shouldn’t be about how you manage big data, but how you are continuing to encourage imagination versus data.

“It’s about ensuring that you know where analysis paralysis ends and action starts, or we will never be able to embrace this new era of customer-lead innovation.”

Case study: Holiday Extras

holiday extras

Holiday Extras sells travel insurance, hotels and parking near airports. In the past three years, turnover has risen from £160m to £200m a year, despite the number of air passengers leaving the UK falling from 40 million to 32 million in the same period.

Nilan Peiris, chief technology marketing officer, says in a downturn businesses look very closely at how to cut costs and how to leverage their assets. One of those is data.

“The companies that will win online are those that try to learn as much as possible about their customers and how to help them achieve their goals. We spend a lot of time looking at the data we have.”

Holiday Extras has a single view of customers and a leadership team that makes it a priority to focus on deriving intelligence from internal and external sources, such as from ONS and Google.

“We have processes for acquiring this data and feeding it through to the right channels in a timely fashion,” says Peiris. “We ‘explode’ the customer data by running it through publicly available sources. For example, when customers provide their car details when making a booking, we use this to get a valuation of the car and this prompts an appropriate hotel recommendation.”

Sometimes the offers will also be split, so the accuracy of the data can be further analysed. “It’s just a way of using the data to gather a richer picture of our customers,” he adds. “A big driver for growth is to get clever about acquiring new customers and make more of those that you already have. With the market shrinking and budgets slashed, chief marketers are being challenged to redefine themselves.”

The CMO’s role – or CTMO in Peiris’s case – is critical in all this. He sees an emerging role for the ‘performance marketer’, who uses experience and data to identify the opportunities that enable innovation and growth.

However, he cautions: “You need to watch the data doesn’t stamp on creativity. In getting scientific, you can lose humanity and miss some big opportunities.

“We’ve created a culture of data-based decision-making and use this as a framework for all our business decisions. Within this, we unleash creativity in trying to improve conversion, developing a new offer or building a new marketing campaign. Success online is in marrying these two disciplines.”

Sponsor viewpoint: SKY IQ

tony mooney

sky iq

Tony Mooney
Deputy managing director
Sky IQ

The challenges facing chief marketing officers when it comes to data overload is an interesting topic, but I have a feeling of déjàvu. The subject of data management comes around with some regularity, often when there are new things to take note of. At the moment, the buzzword is ‘big data’.

The electronic footprint that consumers leave has increased exponentially of late and that has left brands littered with both structured and unstructured data. And that brings up the inevitable question of how to manage it all.

Too often, the sheer amount of data gathered, rather than its relevance, is perceived to be the marker of success. There’s an assumption across the industry that “more data is better”. What we are in danger of forgetting is that the only aim of data collection is to deliver better insights and make better decisions.

Collecting masses of data for the sake of it only stifles the decision-making process – which is why I believe marketers must stop obsessing over “big data” and shift their focus to relevant data.

You always have to keep in mind what you are selling and to whom. As someone with an interest in consumer behaviour, I’m always more interested in what people do, rather than what they say. Data can provide that.

Does that mean the role of the CMO is changing? I think the world of data is slightly out of most CMOs’ comfort zones. However, they have key performance indicators and return on investment to worry about.

The web has brought us a far greater measurement of certain aspects of marketing - enabling marketers to measure the effectiveness of their marketing by looking closely at cause and effect, which clearly highlights what isn’t working and enables us to learn from this and make the necessary changes quickly.

But for any CMO in a reasonably-sized business, life is complicated. There is a ‘bandwidth’ issue here and I wonder whether the marketing departments of today, as well as their agencies, actually have the bandwidth to deal with these new multi-channel data streams – and use it to communicate on a more personal level with their customers.

The CMO has to lead from the top and be bold about instructing their marketers to work across their teams for the greater good. He or she should focus on the customer and serving them effectively, as well as key objectives for the business – and the structure of how the teams work should be centred on these. Only then can they have any hope of mining the data, taking what they need and using it effectively.

 

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