Human And Social Sciences at the Common Conference
November, 18. - 22. 2013
Marketing in the Era of Big Data
Joaquim A. Casaca
Marketing Department
IADE-U Instituto de Arte, Design e Empresa Universitrio
Lisboa, Portugal
joaquim.casaca@iade.pt
Abstract Big data refers to the vast amount of data that is now
being generated and captured in a variety of formats and from a
number of disparate sources. Big data is changing the way
organizations and people do business, discover insights and
interact with one another. To obtain value from big data,
organizations need a cohesive set of solutions for capturing,
processing, analyzing the data and discover new insights to
making repeatable decisions and scaling the associated
information systems. The proliferation of digital channels has
created a whole slew of new challenges for marketers today, as
consumers interact with organizations much differently than they
did in previous years. In this work, we advocate that we are faced
with a new paradigm that requires new approaches and different
skills that did not exist until today. We concluded that technology
changes are creating an entirely new kind of marketing discipline
and a new kind of Chief Marketing Officer and a new function
called data scientist
Keywords- Big data, big data analytics, marketing, data
scientist.
I. INTRODUCTION
The proliferation of devices, applications and the extensive
use of the Internet by social networks are generating new data
at every second time. This data could be coming from all type
of sources like sensors, mobile and GPS devices, company
websites, social networking sites, legacy data sources, etc.
Furthermore, user activity generates data about their
preferences, needs, as well the quality of their experiences [1].
Even when the device is on offline mode, the associated
network is generating data with their location and other type of
data that could be used for different purposes. All this
unstructured information (email, video, blogs, call centers
conversations, social media) represents about 85% of data
generated today, while 15% of the information generated by
legacy systems stored in relational databases is structured
information (R34).
This explosion of devices, applications (Internet-based or
legacy) and the cloud has ushered what we call today the era of
big data. This new reality brings new challenges to companies:
what to do with this amount of data; how exploit it and extract
the insights to improve our business? The decision-making
process is now based in the ability to analyze large amounts of
data and the ability to combine data from several sources to
obtain a more comprehensive view of the business [1]. This
new paradigm isnt a technological issue, but rather a problem
of analyze data from different sources, exploit it and make
decisions on real time to full fit the customer needs and
expectations. Big data is changing the way organizations and
The 1st Human And Social Sciences at the Common Conference SECTION
http://www.hassacc.com Marketing, Advertising
Antnio Pimenta da Gama
Marketing Department
IADE-U Instituto de Arte, Design e Empresa Universitrio
Lisboa, Portugal
antonio.gama@iade.pt
people do business, discover insights and interact with one
another.
This paper addresses the phenomenon of big data and its
characteristics, the role of big data analytics and the new
challenges of the marketing in the era of big data.
II. BIG DATA CHARACTERISTICS
The nowadays phenomenon of big data has its roots in a
fundamental shift in the data environment, i.e., reflects the
increased digitization of business and of life, the decreasing
cost of storing data and the increasing availability of third party
data [3]. Digital data is now everywhere, in every economic
sector, organization and in every user of digital technology. So,
big data refers to the vast amount of data that is now being
generated and captured in a variety of formats and from a
number of disparate sources. Since this complex data is
difficult to process with traditional database management tools,
organizations face new challenges with the capture, storage,
search and analysis this kind of data.
According a Gartners widely accepted definition describes
big data as high-volume, high-velocity and/or high-variety
information assets that demand cost-effective, innovative forms
of information processing for enhanced insight, decision
making, and process optimization [4]. This definition
highlights three main characteristics of big data, which are
known as the three Vs: volume, velocity and variety.
Volume is related with the significant increase amount of
data and its granular characteristics. Velocity means that big
data arrives more rapidly, often in real-time, and needs to be
used more rapidly. This means that real-time data only adds
value if turned into real-time insight [3]. Variety relies on new
types of data, from company websites, social network sites, call
centers conversations, etc. This diversity of data couldnt be
integrated in a single manner into a unique large database.
Indeed, companies will need to know witch decisions could
take from each type of data and the value added that kind of
data brings to business, e.g., different type of data solves
different business problems.
To improve their existing process and drive better decision-
making, organizations must focus on the analytic value that can
be gained from transforming huge volumes of complex and
high-velocity data into pure business insights. To achieve this
purpose, organizations must know what data to use, how to
process, correlate and limit the data and how to interpret and
apply the resulting insights to different processes. To respond
to these needs, the information must be adequate, accurate and
actionable (the three As).
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Big data creates value and have implications on how
organizations could be designed, organized and managed [2],
namely:
Enabling experimentation to discover needs, expose
variability, and improve performance;
Segmenting populations to customize actions;
Replacing/supporting human decision making with
automated algorithms;
Innovating new business models, products, and
services.
Big data brings new realities to organizations and a new
approach to data processing. The organizations that explore big
data differ from those that make a traditional treatment of data,
because (1) they pay attention to data flows and not to the data
stocked in a data warehouse; (2) they rely on data scientists
and product and process developers rather than data analysts;
(3) they are moving analytics away from the IT function into
core business, operational and production functions [5].
III. BIG DATA ANALYTICS
Big data doesnt only bring new types and storage
mechanisms, but new types of analysis as well. To get any
meaningful insights from high-volume, high-velocity and high-
variety information generated by all type of devices are
necessary two different technologies: (1) data extraction and
integration tools and (2) business intelligence, analytics tools,
statistics, data mining, etc. Some organizations could have the
IT infrastructure and the expertise to handle large amount of
structured data, but they lack the ability to exploit it and derive
actionable intelligence in a timely way [6]. To obtain value
from big data, organizations need a cohesive set of solutions
for capturing, processing, analyzing the data and discover new
insights to making repeatable decisions and scaling the
associated information systems.
Big data analysis offer many practical business
opportunities to organizations including the optimization of
operations, the delivery of better, more informed decision
making tools, the management and mitigation of financial and
other risks, and the development of new business models all of
which will lead to an increase in productivity and innovation.
These data-driven companies dont just collect data; they use
data to find new analytical insights about their customers.
Besides the increased opportunities available to businesses, big
data also creates more challenges, in particular, the time value
of information. Since the utility of some data points declines
very quickly, theres a premium on accelerating the process of
turning data into information and information to action.
According [7], big data analytics helps discover new facts
about a business operation (new customer segments) and helps
a business understand the highly volatile nature of the market
and gives the power to change business tactics for survival as
well for growth. Furthermore, it gives insights into the problem
areas of a business such as change in customer behavioral
trends, competition etc.
A survey issued by [8] concludes that top-performing
organizations use analytics five times more than lower
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Human And Social Sciences at the Common Conference
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performers. Beyond that, this survey found a widespread belief
that analytics offers value. In tune with this fact, half of the
survey respondents said that improvement of information and
analytics was a top priority in their organizations and more
than one in five said they were under intense or significant
pressure to adopt advanced information and analytics
approaches [8, p. 22].
With digital channels stretching from customer portals and
emails to mobile apps and social media, analytics is necessary
for improving the way organizations engage customers,
generate leads, grow brand loyalty and build revenue.
According [7], the most important advantages of embracing big
data analytics are, among others, the following:
Better targeted social influencer marketing;
More numerous and accurate business insights;
Segmentation of customer base;
Recognition of sales and market opportunities;
Automated decisions for real-time processes;
Definitions of churn and other customer behaviors;
Detection of fraud;
Quantification of risks;
Trending for market sentiments;
Understanding of business change;
Better planning and forecasting.
IV. THE NEW CHALLENGES OF THE MARKETING
The proliferation of digital channels has created a whole
slew of new challenges for marketers today, as consumers
interact with organizations much differently than they did in
previous years. They engage via the web, email, social media,
entertainment consoles, interactive television, mobile devices,
location-aware applications, voice response, and print
advertising. Thus, for marketers get a broad and deep
perspective of customer expectations, behavior and
satisfaction, they must monitor all these channels to obtain a
real picture of customer behavioral trends, rates of response,
campaign effectiveness and successful marketing objectives
[2].
Big data makes available more data to marketers than was
conceivable even a few years ago. But big data by itself does
not drive business value, since the data is vast and complex.
According [2], its necessary use advanced analytics to analyze
virtually unlimited amounts of data and attributes and making
deep multi-channel analysis, real-time personalized web offers
and very precise personalized e-mail offers. The use of
predictive analytics allow organizations to gain competitive
advantage over their competitors, because predictive analytics
provides the ability to discover patterns and trends in historical
sales and marketing data to determine how potential and
existing customers are likely to behave in the future.
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To get the most out of their predictive analytics
implementation, sales and marketing departments should
follow certain key steps, namely [10]:
Understanding the business need;
Understanding the data;
Preparing the data;
Modeling;
Evaluation;
Turning results into action;
Delivering predictions to business users.
On the other hand, according [11], to align marketing
priorities with the business objectives, create highly relevant
customer experiences, and maximize the marketing return on
investment, companies should enhance their analytics
capabilities in at least four key areas:
Test and learn;
Measurements and evaluation;
Insights and understanding;
Performance analysis.
A basic premise in creating a marketing campaign is the
identification of the target market and the ability to effectively
reach it. The traditional segmentation deals with a limited
number of attributes, a small number of broad segments and
uses aggregated data. Due to the attributes of big data its
possible, using predictive analytics, identify micro segments
according to a broad range of parameters, in numerous
combinations. Micro-segmentation provides many advantages
over standard segmentation approaches, which include [12]:
Completely personalized;
Much more precise;
Fully automated.
With micro-segmentation analysis it is possible to do more
accurate churn prediction, since it enables multifaceted and
multisource analysis.
As presented previously, the potential uses and benefits of
big data are endless. Unfortunately, big data also poses some
risk to organizations looking to get its potential and the
individuals whose information is continuously being collected,
combined, mined, analyzed and disclosed. One of the most
significant legal challenges associated with big data, especially
on the consumer side, is privacy. As the collection of
unstructured data becomes more economically viable, and
shifts in consumer usage of technology make a much wider
range of data available, there is an incentive for organizations
to collect as much data as possible [13]. Organizations must be
careful with the potential privacy implications of their
activities, and consider steps to address privacy concerns. Just
because consumers are willing to provide data this does not
mean that its use is free from privacy implications.
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Human And Social Sciences at the Common Conference
November, 18. - 22. 2013
A. The Next Reality of Marketing
As the ecosystem of consumers becomes increasingly
digitized, analytics is moving from a qualification and
measurement tool to a core business decision making
capability. Marketing organizations that want to remain
relevant to the business need to focus on growing their own
analytics skills and should understand they need to transform
themselves by embracing a different culture. A culture in
which analytics plays a crucial role.
A recent research of more than 400 senior marketing
executives [11], shows that more than 70 percent recognize the
need for a major digital transformation of the marketing
organization to give their company a competitive edge and
about one quarter plan to dedicate between 41 and 60 percent
of their employees to marketing, media and customer analytics
in 2013, an increase of five percent over 2012.
These fingers show that marketing has entered a mandatory
transition period. This is a time when migrating away from the
traditional large demographic approaches toward more
granular, data-driven, highly targeted campaigns becomes a
matter of survival, not a matter of choice.
The analytics and marketing services sector is experiencing
explosive growth. Influenced by major trends such as big data,
digital and data-centric marketing, marketing automation,
customer centricity and customer engagement, organizations
are repositioning their services and encountering new
competitors. As companies from different industries converge
on this emerging market, they find themselves in a new war for
talent.
We are faced with a new paradigm that requires new
approaches and different skills that did not exist until today.
Technology changes are creating an entirely new kind of
marketing discipline and a new kind of CMO (Chief Marketing
Officer). This new paradigm relies on:
Understanding each customers as an individual;
Creating a system of engagement that maximizes
value creation at every touch;
Designing your own culture and brand so they are
authentically one.
Marketers are facing new challenges:
Marketers have less control over their brands, because
customer comments and feedback are becoming more
influential to brand perception than advertising;
Product development is challenged to deliver new
products and services quickly and at lower cost;
Organizations face difficulty increasing worker
effectiveness, as work becomes more mobile and
global;
Organizations are challenged by security and
governance concerns.
To achieve these assumptions, CMO need:
Leadership qualities;
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 Human And Social Sciences at the Common Conference
November, 18. - 22. 2013

Organizational changes; The challenge for the marketing organization is not just one
of simply hiring professionals who are adept at techniques such
Technology and analytical skills; as trend analysis, data visualization, statistical modeling,
Partners and vendors; simulation and optimization. What marketing organizations
need are analysts who can employ technical capabilities to
Partners with industry expertise and track record; represent and interpret big data sets to tell a compelling story.
Peer networking with CMOs;
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