You have all this so-called big data, but just how valuable is it? Is the data you collect, particularly in the digital world, all that useful? Are some data points far more valuable than others? These are some of the questions I see organizations wrestling with and I think they're interesting ones because sometimes there's an underlying assumption in these days of the big data hyperbole that more is better. I'm not convinced and here's why.
For digital marketers and analysts, probably their biggest data source in terms of volumes of data they use on a regular basis is their web analytics system. By conventional definitions web analytics data is pretty "big," volumes are large, and velocity is high. But a lot of web analytics data at any one point in time is froth and generates very little value at all, and here's why.
I'll use a very simple segmentation to make the point. If you look at the visitors who visit your websites or use your apps then they'll fall into one of three groups:
Anonymous visitors. These are visitors (or to be precise, device users) about whom you know very little. They have probably only visited once, or maybe twice. There's not a lot to know about them as there isn't enough data to make any sense from. There will be limited information on which channel they came in on, for example, and what they looked at, but not much necessarily to give you a full picture.
Observed visitors. These visitors have visited more frequently, so there's more data and more history, and potentially more to learn. Even though you don't know who these people are, you can begin to build up some kind of profile in terms of patterns of behavior and content consumption. When do they tend to visit? What do they tend to do when they arrive? Sometimes this data can be useful to understand general patterns and trends at an aggregated or macro level.
Known visitors. These are the visitors who you really care about because you have some kind of relationship with them. That relationship might be quite tenuous because all you have is an email address, or it could be quite deep because they're gold card carrying loyalty members. It's likely that you have had multiple touch points with them probably over multiple devices and multiples channels. From the data you've gathered you can build up a deep insight into their behaviors and preferences and leverage that insight to provide deeper, richer, and more relevant experiences. This is valuable stuff!
So, as a visitor migrates through these segments on her customer lifecycle, the data on her gets richer and more valuable. However, the number of visitors in each of these segments gets smaller. By far and away the biggest segment is the anonymous visitors. Depending on the type of business or organization you are this segment could account for between 50 percent and 80 percent of all your visitors, meaning that the vast majority of the data that's collected, processed, stored, and reported on represents a poor return on investment. It's just numbers making up the numbers, so to speak. The real valuable data is on the relatively small numbers of visitors who are meaningful to you. This is the data you can do something with. It doesn't just tell you how many of them there are but who they are, where they are, and what they are like.
As people get more excited by big data, I get excited by small data. It may be small but it's powerful. To use the old analogy, if analysis is like mining for nuggets of gold in your data, then a lot of big data is the ore you have to dig through to find them.
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Neil Mason is SVP, Customer Engagement at iJento. He is responsible for providing iJento clients with the most valuable customer insights and business benefits from iJento's digital and multichannel customer intelligence solutions.
Neil has been at the forefront of marketing analytics for over 25 years. Prior to joining iJento, Neil was Consultancy Director at Foviance, the UK's leading user experience and analytics consultancy, heading up the user experience design, research, and digital analytics practices. For the last 12 years Neil has worked predominantly in digital channels both as a marketer and as a consultant, combining a strong blend of commercial and technical understanding in the application of consumer insight to help major brands improve digital marketing performance. During this time he also served as a Director of the Web Analytics Association (DAA) for two years and currently serves as a Director Emeritus of the DAA. Neil is also a frequent speaker at conferences and events.
Neil's expertise ranges from advanced analytical techniques such as segmentation, predictive analytics, and modelling through to quantitative and qualitative customer research. Neil has a BA in Engineering from Cambridge University and an MBA and a postgraduate diploma in business and economic forecasting.
March 19, 2014