If you’re a small business owner or a professional managing your company’s digital marketing strategy, you're likely aware of the impact big data can have. According to October 2022 data from Statista, the value of the worldwide big data analytics market is expected to exceed $655 billion by 2029, up from about $241 billion in 2021. Although this growth highlights the expanding role of big data across various sectors, the effect on digital marketing is notable. The social media analytics market alone – a main component of many digital marketing strategies – is projected to grow from $7 billion in 2021 to over $26 billion in 2028, according to additional January 2023 data from Statista.
The profound influence of big data is largely due to its key characteristics, the four V’s: volume, velocity, variety, and veracity. Here’s a look at how the four V’s of big data may lead to more accurate data analyses and how these analyses can inform a more effective digital marketing strategy – now and in the future.
The 4 V’s of Big Data
Big data refers to the large volume of data – both structured and unstructured – that inundates a business on a day-to-day basis. It’s too complex to be parsed with traditional tools like spreadsheets and manual data analysis and is typically characterized by four core concepts: volume, velocity, variety, and veracity.
Volume
The chief characteristic of big data is simply how much of it there is. Big data can be culled from various sources, including:
- Point-of-sale (POS) systems, which collect a vast amount of customer and transactional data to reveal purchasing trends
- Web traffic data, such as what appears on social media platforms, e-commerce sites, and search engines and can provide insight into customers' online behavior
- Smart inventory management systems, which leverage tools like radio frequency identification (RFID) tags and Internet of Things (IoT) devices to track inventory data in real time
- Customer feedback tools, such as online and in-person surveys, reviews, and social media mentions
Velocity
Big data statistics can be delivered much faster than conventional data thanks to the advent of emerging tech trends, such as:
- Cloud technology. Cloud-based services, for instance, allow small businesses to access and analyze data quickly without needing extensive infrastructure.
- IoT technology. This refers to the network of physical devices that collect and share data over the internet.
- 5G data streaming. This refers to the latest generation of cellular network technology, which enables faster data transmission speeds.
- RFID tags. These small electronic devices can be attached to inventory items to track their movement in real-time.
Variety
Big data comes in a variety of formats, including:
- Ad responses, such as click-through rates or engagement metrics
- Social media sentiment, or the analysis of customer feelings or attitudes expressed in social media posts
- Email actions, including metrics like open rates and conversions
Veracity
This refers to the accuracy and trustworthiness of big data thanks to:
- Large sample sizes, which reduce the margin of error and bias, in turn providing a more accurate reflection of market trends and a business’ customer base
- Real-time data collection, which allows businesses to make decisions based on the most current information, increasing the reliability of their strategies
- Data validation and cleaning processes that check for and correct inaccuracies, inconsistencies, and duplications to ensure the integrity and quality of data
The Role of Big Data in Digital Marketing
Big data can play many roles in digital marketing. Among the most prevalent are:
- Audience segmentation: Big data allows marketers to compile, explore, and analyze various aspects of behavioral criteria, such as how people use their products and services. It also provides a window into social and demographic factors. The findings can help companies more efficiently determine consumer personas and preferences, making it easier to enhance and optimize marketing messages accordingly.
- Sentiment analysis: By analyzing hordes of data culled from social media posts, reviews, and search queries, marketers can better understand how consumers feel about their brand and products.
- Targeted marketing: Big data analytics can be used to deliver more relevant content to consumers, for example by informing product recommendations, social media advertisements, and email drip campaigns.
- Predictive and prescriptive analysis: Using data, statistical algorithms, and machine learning techniques, companies can use predictive analysis to forecast future consumer behaviors and trends. Prescriptive analysis takes this a step further to suggest actionable strategies based on these predictions.
- Result measurement: Big data analytics make it possible to track, measure, and adjust campaigns in real time, helping companies optimize their digital marketing budget and right-size expenditures.
Potential Benefits of Using Big Data in Digital Marketing
Big data is a cornerstone of data-driven decision-making in digital marketing. By leveraging insights from big data, companies can create more effective and targeted marketing strategies.
Here are a few areas where big data can strongly benefit digital marketing efforts:
- Conducting competitive analysis: Big data can enable businesses to conduct a thorough competitive landscape analysis by aggregating and examining data from various sources such as competitor websites, social media activity, and customer feedback on competitor products. This insight can help companies understand their competitors’ strengths and weaknesses in real-time, allowing for more strategic decision-making.
- Understanding market trends: Big data facilitates understanding market trends by analyzing historical data patterns. This predictive analysis, coupled with actionable insights from prescriptive analysis, can help businesses anticipate market shifts and consumer demands, enabling them to adapt their strategies proactively.
- Enhancing customer experience: Big data analytics can help companies create personalized customer experiences, from customized product recommendations to tailored marketing messages. In turn, this can enhance customer satisfaction and loyalty.
- Increasing profitability: Using big data for targeted digital marketing campaigns may not only reduce advertising expenditure by focusing resources on the most receptive audiences, but also enhance overall sales growth. For instance, by aligning marketing efforts more closely with consumer preferences and behaviors, businesses can achieve better conversion rates and customer retention, ultimately boosting profitability.
Big Data Sources to Refine Your Digital Marketing Strategy
If you’re looking at ways to make big data work for your business, you may want to consider as many data sources as possible. Online sources, like website traffic analytics and social media interactions, can be valuable, but there are also other sources. Resources such as in-store kiosks, smart POS systems, and inventory management systems can be invaluable for gathering data on customer behavior, preferences, and buying patterns. These tools not only provide insights into customer interactions and spending habits, but can also offer critical information on stock levels, product demand, and supply chain efficiency.
Encompassing both online and physical data, this comprehensive view of business data can be key to crafting well-informed marketing strategies, from product promotions to posting product availability alerts and everything in-between.
That said, it can be vital to make sure your data is sourced from reputable and reliable channels. Accuracy and trustworthiness can directly impact the effectiveness of your digital marketing strategies. For instance, verified customer feedback can help guarantee the strategies built on this data are based on actual customer interactions and behaviors, not on erroneous or misleading information.
The Future of Digital Marketing with Big Data
Big data’s role in digital marketing is still growing. But integrating big data with real-world analytics can present challenges such as the complexity of data integration from diverse sources, the need for advanced analytics skills, and the requirement for robust data management systems. These hurdles can be daunting barriers to entry, especially for smaller businesses. Fortunately, there are accessible cloud-based tools that make big data analytics possible even for companies without the capital for major upfront infrastructure investments and data management systems.
Meanwhile, advancements in IoT, mobile technology, and AI assistants are increasing the speed and accuracy at which data is collected, which can lead to more precise digital marketing strategies. Companies that leverage such data, for instance, could potentially create better retargeting campaigns, craft more relevant product suggestions, and deliver advertising content that resonates deeper than ever before.
Despite these advancements, consumers are becoming more aware of – and concerned about – how their data is used and protected, making transparency and respect for privacy essential in maintaining trust and your brand reputation. As big data continues to evolve, companies can navigate these privacy concerns carefully to build and maintain customer trust.
The Takeaway
"Big data" can be more than just a buzzword. For many businesses, it’s becoming a pivotal element in crafting a successful digital marketing strategy. From providing deep insights into customer behavior to enhancing targeted marketing efforts, big data can empower businesses to make informed, data-driven decisions. While addressing challenges such as data integration complexity and privacy concerns, you can discover the substantial advantages of incorporating big data science in digital marketing. Businesses that effectively harness the power of big data may see improved customer engagement, increased profitability, and a competitive edge in their market, among other benefits.
A version of this article was originally published on August 11, 2020.
Photo: Getty Images
