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Big data and the need for better consumer insights

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Big data has given marketers an unprecedented view into the attitudes and behaviors of larger audiences than ever before. But as we become increasingly reliant on big-data analytics, we’re also basing our insights on the same data pool—and arriving at very similar ideas. It’s a race to the middle that can dilute brand perceptions and value.

For brands to stand out, big data isn’t enough. That’s where small data comes in.

In our latest white paper, we show how using small data—the tiny clues that can uncover consumers’ drivers and desires—can uncover consumer insights that can't be found through big data alone.

Read the white paper, and find out how small data can lead to breakthrough ideas that transform brands and brand experience.

Published in: Marketing
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Big data and the need for better consumer insights

  1. 1. Why marketers should think small before going big
  2. 2. Contents 01. What’s next after big data? Small data 02. Small data has a big impact on brands 03. What can small data teach us about consumers? 04. Is data killing creativity? No, and here’s why Contributors: — Ben Grossman VP, Strategy Director, Boston Abbie Walker SVP, Director of Strategy, New York Martin Lindstrom Best-selling Author & Brand Futurist Peter Sun VP, Brand Marketing, New York Talk to us to find out how small data can transform your brand: experience@jackmorton.com
  3. 3. By Peter Sun VP, Brand Marketing Big data has been a welcome disruptor to our industry. It has changed the way we frame and measure consumer behavior. And it has shifted the way we forecast trends and appeal to the people we want to reach. It’s been hailed as the ultimate window into consumers’ minds. But the challenge with big data is that its adoption has become so widespread that brands and their agencies have become extremely reliant on analytics, basing their insights on the same data pool and therefore arriving at very similar insights. It’s a race to the middle that can dilute brand perceptions and value. While big data can tell us what’s working, it isn’t always able to tell us why. Big data alone can fall short of explaining the causes of consumer behavior that indicate unmet needs—those key insights that have the power to help us connect with consumers’ deep- seated emotions. Brands that wish to set themselves apart can’t do so with big data alone. That’s where small data comes in. What’s next after big data? Small data 03
  4. 4. A concept championed in the book Small Data by Martin Lindstrom refers to the tiny clues that can uncover consumers’ drivers and desires. In an era where big data has overshadowed the value of human perception and observation, the principles of small data have the power to set brands apart. And when paired with the metrics that big data gives us, this partnership of correlation and causation can ultimately transform business. At Jack Morton, connecting brands with people through extraordinary experiences is at our core. We believe powerful human insights are essential to fuel the creation of extraordinary experiences. It is for this reason that we’ve embarked on a journey to be part of the small-data revolution and embraced this concept to inform our planning and creative process. As you read on, you’ll discover what possibilities arise when we use both the telescope of big data and the microscope of small data. We’ll show how small data allows us to arrive at more personal insights. We’ll reveal how this measured yet revolutionary approach can help us create breakthrough ideas that connect people with brands in new ways. And we’ll explore how small data brings humanity to big data—how it illuminates information that could otherwise be overlooked and helps big data truly be the window to consumers’ minds we’d all hoped it could be. 04
  5. 5. By Martin Lindstrom Best-selling Author and Brand Futurist Some years ago, I noticed something interesting. When I asked innovators, company founders, and entrepreneurs about the breakthrough ideas that led to their killer brands, I expected them to tell me that their great ideas had emerged from a well-planned brainstorming session or as the result of years of hard work in the lab. Instead, their breakthrough ideas came from seemingly insignificant behavioral observations they’d made while interacting with friends, family members, colleagues, or strangers. These key observations often occurred when least expected, revealing an unmet and previously unrecognized consumer need. These became the foundation for entirely new, breakthrough brands. It was a surprising, thought-provoking insight. After all, who would have thought that Snapchat, the social media app that allows the user to create photos with an ultra-short lifespan, was invented when the founder’s friend tried desperately to find a message containing a photo of himself smoking pot? Or who would have imagined that a priest dropping a Bible on the ground and spilling all his bookmarks would lead to the invention of Post-it notes? Or that a failed insurance claim on a broken surfboard would lead to the invention of GoPro? In our data-obsessed world, we’ve been convinced that billions of data points drive innovation. However, if you peel back the layers of history, you’ll discover that the key to innovation is often a serendipitous observation. Small data has a big impact on brands 05
  6. 6. The missing piece The missing piece in the puzzle, I’ve discovered, are the tiny things found in small data—and though they may be tiny, the potential impact of small data is huge. I’m talking about firsthand observations made in consumers’ homes, in restaurants, in night clubs, in sports clubs, when driving, or on the phone. These seemingly insignificant, seemingly irrelevant observations, once connected, have the potential to identify the vital causation that big data has, so far, been unable to. Srikanth Velamakanni, co-founder of Fractal Analytics, one of the world’s leading data-mining companies once said, “I cannot count the number of businesses that have asked us for a big data solution without really knowing what they are looking for—they’re seeking the correlation without knowing the causation—the small data.” I tend to say that true creativity happens when combining two ordinary things in a new way. In many ways, this is the essence of both small data and big data. There’s probably nothing as powerful as combining creativity with structured thinking. The most exciting thing is that we’ve just begun this amazing journey. So next time you hear the term “big data,” think “small data,” too. Only a couple of years ago, you wouldn’t be able to attend a conference without hearing “big data” mentioned over and over again, nor could you have attended a board meeting at which big data didn’t dominate the agenda. Everyone was intrigued by the notion that a black box of data could magically produce deep insight into humans’ deepest needs, thereby revealing billion-dollar innovation opportunities. Like a kid in a candy store, every CEO proclaimed, “I want one of those!” The term “big data” was supposedly coined by John Mashey in the mid- 1990s over a lunch-table conversation at Silicon Graphics. Since then, experts have proclaimed big data to be some sort of crystal ball, a window into the consumer’s mind; but in recent years, many perceptive industry experts have begun to conclude that the picture is incomplete. Big data has its value, but something is missing. What’s needed is a counterbalance to big data. 06
  7. 7. By Abbie Walker, SVP, Director of Strategy Understanding small data starts with a simple question: “When was the last time you were in one of your consumer’s homes?” Can you remember? What were you doing there? Were you engaged in conversation with them about their lives, needs or goals? The answer from most agencies and clients is more often than not, “Never.” Frankly, that’s a travesty. Most of our business at Jack Morton depends on understanding the needs and goals of our consumers and effectively communicating the value of our brands and products. Why doesn’t our research start in consumers’ homes? What can small data teach us about consumers? Through adopting concepts from Small Data, we have come to understand the wealth of information that can be gleaned from visiting consumers’ homes, from the smallest items they own, to the house itself. A consumer’s house is an unbiased autobiography of the people who live within it; you just need to learn how to read it. But how does one “read” a home? The first step is having genuine curiosity about the person and the space. What do they value over all else? What do they collect fanatically? What made them choose to arrange something a certain way? Why did they choose one item over another? 07
  8. 8. The human side of causation As planners, our research tools only tell us part of the story. We all know that self- reported research is inherently biased and ethnographies only show us behavior. Yet we continue to rely on research methods whose results may be flawed. In trying to get closer to our consumers, we seem to be moving ourselves further and further away from the human beings who actually do the buying. We’re using big data as a fix-all, even though it only points us to the correlation of behavior, not the causation. We’re looking for the wrong things in the wrong places at the wrong times. In order to communicate effectively, we need to find the real need behind human behavior. So what do we need to do to get to that real insight? We need to truly understand our consumer, to experience their life, their priorities, their environment, and to synthesize their personal ‘imbalances,’ as Martin Lindstrom calls them. Imbalances are our conscious or subconscious need to resolve an issue in our psyche. It may be a need to appear more important, successful, loved, sophisticated, creative, or the need to resolve a fear or concern. We all have these imbalances to some extent. Purchasing is the easiest and most efficient way to rebalance ourselves, but it goes deeper than simply buying; it’s how you treat these items too. Is your toothbrush head facing down? You’ve probably got problems with your sex life. Where do you put your fridge magnets—at eye level, or lower down? It could be the difference between your own dreams and your aspirations for your child. Do you collect champagne corks? Perhaps it’s a desire to be perceived as a higher social status. These are all tiny clues—small data that surrounds each of us—that hint at what we want and aspire to. 08
  9. 9. Exceptional brands create extraordinary experiences For us as brand experience experts, small data gathering and analysis is an imperative. How can you create genuine, useful, or extraordinary experiences for people if you don’t know what’s fake, useless, or ordinary for them? We must uncover the one thing they seek most in order to establish balance. It’s clear that embedding ourselves in the world of our consumers, and getting closer to them both in terms of proximity and empathy, is going to be the best way to understand their desires and needs. Immersion into their lives leads us to better, stronger ideas that drive through a true understanding of people. Small data is the missing piece that gets us to genuinely extraordinary experiences, time and time again. 09
  10. 10. Is data killing creativity? No, and here’s why By Ben Grossman VP, Strategy Director From the first time I cracked open a statistics textbook, I was hooked. It began what has been, for me, a long-term love affair with numbers, confidence intervals, experimental design and more. As a methodical thinker and strategist at heart, I was infatuated with the ability to state, with a certain level of confidence and margin of error, the answers to big, practical questions. And while I’ve continued to promote data to inform marketing decision-making and remain a big believer in it, I’ve also come to see its shortcomings. Used irresponsibly, hard data can kill creativity. The myopic marketer may ask why that’s a problem. But creativity works. An academic study reported by Harvard Business Review shows that creative campaigns are twice as effective as those lacking creativity. Creativity moves hearts and minds, but most importantly, it moves people’s wallets. I’ve found a new love working inside global creative marketing agencies: the collision of data and creativity. That’s where the magic is happening today. That’s the future of this industry. 10
  11. 11. The problems with big data So how can data kill creativity? Typically, big data mishaps play out in a few key ways across the brand landscape: 1. Leveling effect By its very nature, big data provides companies with averages and medians. With an increasingly large swath of competitors within industries relying on this data for guidance, it can have a leveling effect on brands, leaving them exploring the same creative territories and preventing innovation. Ultimately this means undercutting differentiation and the ability to charge premiums on goods and services. 2. Misdirection Sometimes, we rely on big data to help us make big decisions, because it is emblematic of a level of vetting that can make risk-averse C-suites comfortable. But marketers should be cautious prior to relying purely on large data sets to make decisions. Sometimes the data, often through poor research methodology, can be a red herring that emphasizes correlation, rather than causation. While the data can often inform decisions, primary research can still be a critical step to informing decision points. 3. Bad brand behavior Perhaps one of the most frequent misses for brands is that, especially in the digital world, it’s easy to become disconnected from customers and the brand experience they are having. Some headlines and calls to action (CTAs) aren’t meant to be combined. Sometimes, individual consumers defy the norms of the data set. Sometimes, media buys are incompatible with creative messages, and it takes going small to see it. 11
  12. 12. Experiences driven by small data And while an influx of big data can end in creative and customer experience mishaps for brands, there’s no question that data is still important. Indeed, the experiences we create with our clients are only as good as the insights that drive them. And data can provide that insight—which is where small data comes in. Its focus on small, seemingly insignificant observations about people have the power to unlock huge, differentiating results. We put the small data approach into practice with our client, Eaton, while creating a campaign targeting IT professionals. Through visiting our audience’s offices and talking to them directly, we learned that people in IT like to decorate their office spaces and show off their IT infrastructure. We turned these seemingly small, inconsequential insights into a campaign where IT professionals created customized infographic posters of their “IT Empires.” The result? The initiative outperformed traditional expectations by 276%, delivering a projected ROI of 1028%. Creative briefs that contain these kinds of small-data-driven insights inspire our creative teams, triggering their imaginations and yielding breakthrough ideas that get results. 12
  13. 13. Right data, right time It’s well documented that the way creativity works isn’t as much of a mystery as we once thought. Science has essentially explained that presenting the mind with the right data at the right time, putting our imagination within some constraints and iterating on our ideas can all drive creative excellence. Here’s how those elements fit into our process: 1. Inspiration We start small—in terms of data, that is. We’re looking for the small details about people, the brand, culture, conversation, or a given offering that focus into an insight and inspires our teams to dream up extraordinary ideas. These insights can be the product of in-home Brand Experience Subtexting (our small-data research method co- developed with Martin Lindstrom), focus groups, friendship groups, secondary analysis or whatever else our strategists deem appropriate given the client’s business challenge. 2. Innovation During our ideation stage, we provide creative stimulus that drives original thinking, without getting bogged down in the details. We encourage our innovation and ideation to be catalyzed by disruptive outsiders, fresh thinking and cross-category interaction among our creative teams. 3. Validation Of course, it’s critical for ideas to be aligned to a business objective. We conduct quantitative and qualitative primary research that tests for receptivity to our concepts or approaches. 4. Optimization The power of big data often is most relevant as our experience enters the marketplace. These larger swaths of data can help us personalize experiences, determine the way people encounter them, assess efficacy and drive improvements that perfect our work. The success of this model is why we can comfortably and happily say that data, used properly, is critical to creativity. Small data, in fact, is critical to creativity. But used improperly, any data—big or small—does have the potential to stall great creative thinking. So at the risk of oversimplifying: Next time you set out to seek data, think small before you go big. 13
  14. 14. Want more? Please get in touch Contact Peter Sun VP, Brand Marketing peter_sun@jackmorton.com Read our blog at jackmorton.com/blog Follow us on twitter @jackmorton Visit us online at jackmorton.com About Jack Morton We’re a global brand experience agency. We generate breakthrough ideas, connecting brands and people through experiences that transform business. Our portfolio of award- winning work spans over 75 years across event marketing, sponsorship marketing, promotion and activation, experience strategy, employee engagement, digital, social, and mobile. Ranked at the top of our field, Jack Morton is part of the Interpublic Group of Companies, Inc. (NYSE: IPG). © Jack Morton Worldwide 2016

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