Much of the online marketing and IT world had been buzzing with the term “big data” for several years now, but really within the past 6 months its picked up steam. Like any of the latest trends, many are scrambling to jump on the bandwagon without fully understanding what big data is and how it can be put to use. From everyone’s trusted definition source, lets take a look at what Wikipedia has to say about what Big Data really is.
…big data is a collection of data sets so large and complex that it becomes difficult to process using on-hand database management tools or traditional data processing applications. [big data] allows correlations to be found to “spot business trends, determine quality of research, prevent diseases, link legal citations, combat crime and determine real-time roadway traffic conditions. – Wikipedia, Big Data
The outcomes of being able to use Big Data sound pretty awesome right? But the trouble is how does the average-sized company with an average-size IT and marketing department get there. The short answer is, they don’t. At least not as fully as some of the giants do.
Two of the largest retailers that I have heard of using big data to their advantage are Amazon.com and Cabela’s. Amazon is valued at over $111 billion. Cabela’s comes in at a not too shabby $5 billion. These are companies that have resources beyond our imaginations devoted to IT and marketing to make all the data they collect (which is also a lot) work for them. And they also have money to invest in big tools that help them with this as well, its not completely managed in-house. A Harvard Business Review study found that data-driven decision making helps high-performing business achieve up to 6% greater profits than the competitors. Well, that increase for someone the size of Amazon or Cabela’s is huge and is worth devoting thousands of dollars into technology and resources to achieve. But for the average sized business, its critical to consider the ROI of investing in big data for a relatively small % increase in profits.
So what are the smaller guys left to do?
Start looking at the data you do have. You have it, your competitors have it, and you don’t necessarily need expensive tools to get started. Think of just your web presence. You have social media insights, your web analytics software, maybe call-tracking data, a/b test results. The key is to start integrating what you have and look for patterns that demonstrate success. Facebook Insights data can help you begin to build a more robust picture of your target market which can then be used for a display advertising campaign, or landing page design changes that better speak to their interests. Like all things web, don’t be afraid to test and fail quickly, but know that you need to collect enough data about these tests to inform future decisions. These are critical insights that any good analyst from your team or partners can help you with.
And remember to not be discouraged, as even the big dogs who think they have their individual customers figured out, sometimes get it wrong.