Key performance indicators will become far more proprietary as calculations and analytics continue to integrate into everything from search engine marketing to baseball, Billy Beane, general manager for the Oakland Athletics Major League baseball team, told MediaPost.
Through analytics, Beane built a template for profitability, turning the league's lowest-salary budget team -- Oakland A's -- into a winning organization. The team just wanted to survive, Beane said.
His business model took into consideration a player's contribution to scoring runs, base hits and batting averages, as well as geographic location, demographics and more.
Beane views the strategy as myopic, but credits "Moneyball" author Michael Lewis for tying together the A's business model with other industries, such as search engine marketing. "The genius is not what we did, but rather Michael's ability to turn it into something to which others could relate," he told MediaPost at the Covario INFLECTIONpoint 2012 conference in Huntington Beach, Calif. on Tuesday. "It was more serendipitous than anything else."
There's a correlation between what Beane is doing with the Oakland A's and search marketing, according to Neil Doshi, Citigroup analyst. "There's a huge push for the use of data and analytics to drive business decisions," he said."Billy proved baseball is not just a game. It's a business, and he's running the Oakland A's as a profitable business. Similarly, in the early days of online marketing it was all about the creative, but now that has shifted to analytics."
The A's just wanted to make sure the team got a return on investment, Beane said. So the team's strategy in 2002 turned toward basing decisions on information rather than experience. Demographics had a major impact on whether a player achieved success. Players from Dallas, Los Angeles or Atlanta had a better chance of getting into the major leagues by virtue of the location and the competition.
This strategy might sound a bit familiar to most marketers, as more companies use analytics to base marketing decisions.