Advertisers are getting access to mountains of information about consumers from social media and other digital sources, but by their own accounts are still largely failing to exploit this “Big Data,” according to “Marketing ROI in the Era of Big Data,” a study presented by Columbia University Business School professors and the New York American Marketing Associatino at the Brite conference hosted by the Business School on March 5-6.
The study, based on a survey of 283 corporate marketing decision makers conducted by Research Now between January 27 and February 8 of this year, addressed an array of deficits in the way data is collected and employed, ranging from the type of data collected, to the frequency of collection, to the internal data-sharing mechanisms used (or not used) by corporate advertisers. However, the top-line results speak for themselves -- and reinforce oft-heard complaints about the continuing lack of effective ROI for social media advertising.
Marketers know their efforts need to be data-driven: 91% of respondents agreed that successful brands use customer data to drive marketing decisions, including 100% of respondents at the CMO level. And 87% agree that capturing and sharing the appropriate kinds of data is important to effectively measuring ROI.
But looking at general data usage (covering social media as well as other digital sources) 39% of corporate marketers said their own company’s data is collected too infrequently or not real-time enough. Meanwhile 51% said that a lack of sharing customer data within their own organization is a barrier to effectively measuring their marketing ROI. What’s more, 37% of respondents did not include any mention of financial outcomes when asked to define what “marketing ROI” meant for their own organization. In the same vein, 22% said they’re using brand awareness as their sole measure when evaluating their marketing spending. Most damning, 57% are not even basing their marketing budgets on any ROI analysis.
Clearly, digital ROI remains very much undefined, especially when it comes to social media, where many companies are neglecting to collect the data inputs needed to grapple with the ROI issue. Although 74% of respondents said their companies collect demographic data, and 64% customer transaction data, just 35% track social media content created by customers and targets, and just 19% collect customer mobile phone or device data. 29% said that their marketing departments have “too little or no” customer data.
Even when the appropriate data is available, mechanical and structural obstacles prevent it from being exploited. Over a third of respondents, 39%, complained that they can’t turn data collected from digital sources into actionable insights, while 51% said there is a lack of sharing data across their organizations, and 42% said they’re unable to link data together at the individual customer level. On the output end, 45% said they aren’t using data to effectively personalize marketing communications.