Making sense of "Big Data"
In the marketing world, if you haven’t heard of “big data,” you haven’t been paying attention. Big data draws on four key sources of information:
- Internal data comes from inside the company and includes, among other things, monetary transaction data.
- Second-party data is outside-managed, although “paid for” by you … information like shipping records, website logs, and social media reviews.
- Third-party data is packaged information that is “attributable,” such as D&B credit reports.
- Aggregated data is publicly available from the U.S. Census Bureau, BLS and other institutions.
How do companies use these different types of data?
- Internal data often drives the bulk of marketing decisions because they go right to the heart of customer behaviors.
- Second-party data can provide good clues about customer intent and preferences.
- Third-party data makes it easier to identify new opportunities by applying behavioral characteristics to the larger market.
- Aggregated data helps define business “context” – the conditions outside of your control that could affect the marketing decisions you make.
But how can you harness all of this data in a way that’s time- and cost-affordable?
Start by thinking what your world would be like if you had 100% certainty about what, where, when and how each of your customers would buy.
Then work backwards. Think about each data category and build a representative model. Attaining even 70% of the full picture is well-worth the effort!
Remember: Not all data is of equal importance. Generally, the further away the data is from the customer transaction, the less valuable it will be to your model.