An interesting piece in TechCrunch yesterday highlighted the growing significance of data gathering and analysis, even for companies that have not traditionally relied on manipulating and analyzing data in their operations. The automation of so much of business—and marketing especially—as the Internet Age has progressed has caused there to be infinitely more data available about internal and external company interactions than ever before.
I think the companies that will win in any given industry in the next decade will be the ones that figure out how to use the data they are creating and apply it to optimizing their business operations. The major technology companies have done this since their inception, but the rise of broadband access and computing power has enabled businesses in other industries to capitalize on the data they create, as well.
Automated CRM systems have already enabled data-based process in the sales function, allowing that business function to be tracked and managed by activity, type of contact, and individual sales person, while also providing top level data about the whole organization’s operations relative to sales. Project management systems like Basecamp, Pivotal Tracker, and others extend the monitoring and data gathering to the operations side of the business, excising waste and inefficiency as time is tracked on specific elements of the service or product development.
But while those changes have been significant, the effect on marketing has been even more profound. We are entering the era of data-driven marketing, where the sum total of digital interactions with a company can be traced back to the advertisement or company action that drove the consumer to buy a product or visit a site.
Where as traditional marketing operated on vague metrics like cost per thousand impressions that could not be tracked and analyzed easily because data was not gathered on the efficacy of the impressions in producing a desired action by the customer. The effectiveness of print ads was extrapolated based on the average number of people who read a given newspaper or magazine, rather than the number that were actually affected by the business’ advertisement at all.
The rise of Internet based media like social, search engine, and email marketing has brought data to the forefront that tell a much clearer tale about the efficiency of the specific outreach. Data-based marketing is much more efficient and transparent than previous forms of media, and that will continue to make it more and more attractive. If companies can figure out ways to successfully interpret changes and patterns in the data these emerging media, they are much better positioned to gain from the current data explosion.
