New research from the Data-Driven Marketing Institute outlines the scope and flow of data through our data-driven economy.
Marketers instinctively know the value of marketing data - it's the fuel that drives relevancy, engagement, response and ultimately: Revenue.
However, it's hard to find the hard, cold facts around what, exactly, that data is doing for our industry and the economy. New research from the Data-Driven Marketing Institute, a think tank of the Direct Marketing Association (DMA), outlines the scope and flow of data through our Data-Driven Marketing Economy (DDME). (Full disclosure: I work for DMA.)
The Value of Data: Consequences for Insight, Innovation and Efficiency in the U.S. Economy shows that yes, the Data-Driven Marketing Economy is big--and has big impact. There are some surprising aspects, though, which may provide inspiration and opportunity for your business.
First, the facts:
The report was conducted for policy conversation, not necessarily marketing purposes. However, I see three primary areas of import for marketers here:
Proving the Value of Data-Driven Marketing
First, proving value internally and ensuring investment is commiserated. "Data" in the report is not necessarily only digital. The study investigated many different sectors and found value being added in many ways that vary from rented lists of prospects, audience segments assembled by online publishers, personalization of direct mail offers, and all forms of delivery (e.g.: USPS sorting machines, Facebook servers, variable data printers).
In this way, the authors focus on the scope of our data-driven economy, not just the scale. As marketers, our task is to understand the value of individual data to our business so that we can invest properly, protect it and steward the responsible use of it.
Consider the impact of marketing data in:
Demonstrating the Value of Data to Digital Channels
One of the more surprising and counter-intuitive findings of this report is that a large, even disproportionate amount of the data-driven economy is takes place in the off-line, non-digital economy. The authors account for this by explaining that the fees associated with audience classification and assembly in the offline world are significantly higher, not that digital channels are any less data-driven. The authors find that the comparison of email marketing and direct mail helps "illustrate a general insight into the overall efficiencies produced throughout the DDME."
The report finds, "Email's virtue is that the marginal cost of delivery is virtually zero. Yet the study found its net value added at $1 billion, suggesting a paradoxically low level of expenditure by marketers on such an inherently attractive medium. By contrast, direct mail with its reportedly lower return on investment was found in this report to have a net value added of an order of magnitude larger than that of email."
Moving Conversations from Fear to Fact
Third, we need to protect our data-driven way of life. In our increasingly pressured policy environment, where Congress, state legislators and regulators want to restrict marketers use of data for marketing purposes, this study also definitively shows that regulation restricting the responsible use of data would impact innovation, small businesses, jobs and economic growth... and harm the U.S. Economy.
Check out the full study and share your impressions of the findings in the comments.
Stephanie Miller is a partner with brand and marketing technology strategy firm TopRight Partners, which helps customers use the technology they have today to do the marketing they want to do today and tomorrow. She is a relentless customer advocate and a champion for marketers creating memorable customer experiences. A digital marketing and CRM expert, she helps sophisticated marketers balance the right mix of people, process, and technology to optimize a data-driven content marketing strategy. She speaks and writes regularly and leads several industry-wide initiatives. Feedback and column ideas most welcome, to smiller AT toprightpartners DOT com or @stephanieSAM.
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