Value of Using Big Data How to Guide

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Big Data refers to having a dataset so large and complex that you cannot process it using the regular database management tools. The definition of Big Data, however, is a moving target. There is no …

Big Data refers to having a dataset so large and complex that you cannot process it using the regular database management tools. The definition of Big Data, however, is a moving target. There is no specific limit on data size to qualify as “big” and it can depend on the organization managing the data set’s capabilities. Download related templates @ http://www.demandmetric.com/content/value-using-big-data

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  • 1. How-To Guide © 2014 Demand Metric Research Corporation. All Rights Reserved. Value of Using Big Data By Jerry Rackley, Chief Analyst EXECUTIVE SUMMARY Traditionally, marketers connected with individuals through surveys, focus groups or mall intercept surveys. Today, we have come quite far from tradition, finding ways to accumulate much more information about the intimate behaviors of our consumers. Think of yourself as a consumer, going about your regular day. You communicate using your cell phone, post to Facebook, send out a Tweet, browse the internet, make purchases, share music, search for something of interest online. As a consumer, you wouldn’t think twice about those daily activities. However, as a marketer, we realize that through these actions, customers are creating their own enormous trails of data. This data represents a current hot topic for marketers: Big Data. By definition, Big Data is a large dataset so complex it defies processing and analysis using existing database management tools. Big Data comes in many forms, both structured and unstructured, such as web-based digital images, online videos, blogs, chats, forums, internal data, GPS signals and purchase transaction records, to name a few. An overwhelming amount of data exists – how can marketers manage this data and use it to their advantage? This How-To Guide will outline the following:  What is Big Data?  How to manage the overwhelming amounts of data using the 3 V’s  How marketers can benefit from Big Data
  • 2. How-To Guide © 2014 Demand Metric Research Corporation. All Rights Reserved.  Challenges that marketers may face  Action plan for getting started with Big Data WHAT IS BIG DATA? Big Data refers to having a dataset so large and complex that you cannot process it using the regular database management tools. The definition of Big Data, however, is a moving target. There is no specific limit on data size to qualify as “big” and it can depend on the organization managing the data set’s capabilities. Big Data can come from many different sources, both internal and external, including but not limited to: sensors, posts to social media sites, digital pictures and videos, purchase transaction records, MP3’s, online sharing, cell phone records, etc. Companies are creating a vast amount of data as it becomes more accessible through these sources. DESCRIBING BIG DATA The three common factors for describing Big Data are the 3 V’s: high volume, high velocity and high variety. Big Data is essentially information that requires new forms of processing to integrate with decision-making, discovering new opportunities and optimizing the process. Here is the description of the 3 V’s:  Volume (Large amounts of data) – there is a very large amount of data that is becoming accessible to marketers. This volume of data provides opportunity for those who develop the capacity to process it.  Velocity (Speed) – The rate at which the data is coming or changing, and how quickly it’s used to create real value. Velocity increases as the rate at which data flows into the organization grows. With so many sources of information, data is available at increasingly rapid speeds.  Variety (Types) – The diversity of data types and sources. This data is both structured and unstructured data, and examples include movie files, images, documents, text, call center notes, geo- location data and others in an increasingly wide variety.
  • 3. How-To Guide © 2014 Demand Metric Research Corporation. All Rights Reserved. THREE KEY ADVANTAGES FOR MARKETERS  Advantage #1: ROI – Marketing has always been a difficult discipline to demonstrate ROI and it’s under constant pressure to demonstrate true business value. Big Data analysis is proving invaluable at helping drive business decisions across various organizations and having a role in improving ROI. Big Data allows marketers to capitalize on unmet needs in key market segments and can facilitate real-time ROI measurement. For example, spending on digital marketing, projected to significantly increase by 2015, is being fueled by the ability to demonstrate marketing ROI using Big Data. This increase also provides us with more data to analyze, placing more beneficial research at our disposal.  Advantage #2: Creates Value & New Opportunities –Marketers create value using Big Data in many ways by allowing greater information transparency, making insights from that data more accessible and usable for marketers. Big Data analytics can expose variability by collecting more accurate and detailed performance information. Using Big Data, you can achieve more precise segmentation of customers that in turn lets you tailor your products and services to better meet their needs. Big Data analytics creates value by enabling data-driven decision-making on a level and scale previously not possible because of the sophisticated analytics involved. One of the greatest advantages of Big Data is the ability to create an optimized and personalized marketing strategy. The analysis of Big Data allows marketers to create highly personalized marketing approaches based on what you can understand about individual customers and their buying patterns. Furthermore, this level of analysis can provide insights that allow marketers to more effectively allocate their marketing budgets and achieve a higher ROI. Predictive analytics using Big Data can even help organizations understand how customers will respond to a proposed price change. The exploitation of Big Data provides organizations with tremendous opportunities to gain competitive advantages.
  • 4. How-To Guide © 2014 Demand Metric Research Corporation. All Rights Reserved.  Advantage #3: Improving Analysis – Incorporating data from many different sources can help improve the process and detect problems more quickly. Adding an analysis of social media to the mix, you can understand how their customers feel about your product or service, which is remarkably valuable. Analyzing Big Data trends can help develop strategies with the messages you can deliver and when. For example if you analyze the data from coupons sent out and merge that information with regional data, demographic data and average spend data, you can start to paint a picture of who your best customers are and how best to connect with them in the future. CHALLENGES Although there are many opportunities for marketers to take advantage of big data, there are also a number of challenges presented. The main challenges include:  Volume – The sheer volume of data presents a challenge in how to properly manage all the data and ensure the amount of storage space is available. The proper management and analytics software is required to analyze all the data. In addition, the right analytics skills are needed to perform the analysis and deliver results.  Importance – Another challenge is capturing which data is most important, finding the most important data as it happens and delivering it to the right people. Marketers may find it challenging to make use of the information once it is discovered and find the meaning of the important data.  Harmonization – Data harmonization is often a challenge. Organizations typically have volumes of data in different formats, structures and databases, making it difficult if not impossible to have a single, harmonized view of it all. Harmonizing data from disparate data sources is often a barrier to Big Data analytics success.  Security – Issues with security, privacy, cloud storage and information theft are all issues that have been linked to the age of big data.
  • 5. How-To Guide © 2014 Demand Metric Research Corporation. All Rights Reserved. Although there are risks and challenges involved with analyzing Big Data, when managed properly, the insights marketers can obtain from this data provides marketers with a significant advantage. ACTION PLAN Get started with big data by implementing the following steps: 1. Vision – Success with Big Data begins with articulating a vision for leveraging it. For most organizations, this means harnessing relevant data and using it to make the better decisions.  Your vision should lead to aligning any Big Data initiative with specific business goals. 2. Skills – Most organizations don’t have the skills in-house to pursue Big Data initiatives. Identify your skills deficiencies and put a plan in place to acquire them.  Skills are necessary to design and implement Big Data architecture and also perform the analytics work.  Consider using a third party company to provide consulting services to help establish an Analytics Center of Excellence within your company. 3. Architecture & Systems – Design your Big Data architecture: this is the System design, data flows, timing, and data models required to support a Big Data initiative.  Consider the alternatives for a platform and tool set you will use and make recommendations for them. 4. Pilot – Identify a pilot project to prove the value of Big Data that uses your data to solve a real problem.  Your pilot project will provide the basis for a business case to make a long-term investment in Big Data analytics, and also create the necessary internal support.
  • 6. How-To Guide © 2014 Demand Metric Research Corporation. All Rights Reserved.  Use the results of your Big Data pilot to help define the right metrics for measuring future success. 5. Business Case – Combine the results of your pilot with the recommendations for architecture and systems to develop and present a business case for investing in Big Data. BOTTOM LINE By using Big Data, organizations can seize the opportunity to improve marketing ROI, develop new opportunities, tailor promotions to specific target markets and help optimize marketing strategy. Big Data is a game-changer with the capability to drive better decisions while disrupting many industries. It is a real and growing discipline, often housed with the Business Intelligence unit of a company. Successful companies are using Big Data and analytics to compete more effectively, because it provides one of the best ways to deeply understand and engage customers in a way that inspires greater loyalty.