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Interactive, direct and digital marketing: A future that depends on better use of
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Merlin David Stone, Neil David Woodcock,
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1, pp.4-17, https://doi.org/10.1108/JRIM-07-2013-0046
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JRIM
8,1 Interactive, direct and digital
marketing
A future that depends on better use
4 of business intelligence
Received 16 July 2013 Merlin David Stone and Neil David Woodcock
Revised 4 October 2013 The Customer Framework, Ascot, UK
8 December 2013
Accepted 8 December 2013
Abstract
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Purpose – The purpose of this article is to explain how the management of the two areas business
intelligence (BI) and customer insight (CI) needs to be brought together to support a company’s
interactive marketing.
Design/methodology/approach – The article is based on the author’s work in consultancy and in
assessing client company’s customer management capabilities and performance, as well as a review of
some of the literature on BI and CI.
Findings – The article suggests that companies need to pay close attention to the governance of BI,
as a self-service approach to BI becomes increasingly used by CI teams.
Research limitations/implications – The review of literature carried out by the authors suggests that
the interface between BI and CI is poorly researched and would benefit from a significant research effort.
Originality/value – The focus on the interface between BI and CI is relatively new. The authors
hope that it will trigger significant research.
Keywords Data analytics, Business intelligence, Customer data management, Customer insight,
IT management, Marketing information systems
Paper type Viewpoint
Introduction
The advent of interactive marketing
Most corporations must now “market in a digital world”. The “always on” consumer
(and business consumer too) is able, and increasingly likely, to search, enquire, interact,
complain, buy and pay through mobile devices. Marketing for most corporations is
becoming increasingly interactive and “always on”. Delivering an efficient (for the
customer and the company), relevant (personalised) and engaging experience
increasingly relies on a deep knowledge of the consumer; who they are, the devices
they use to connect to the company and the content they want to see.
Modern interactive marketing demands deeper understanding of customers and
their behaviour and how they like to interact with the company and the ability to
deliver personalised experiences which they find useful and engaging. There are few
marketing, sales and service situations where the corporation is not able – at least in
principle – to gather the logistic, operational, marketing, sales and service data which
Journal of Research in Interactive tells the corporation whether the customer has been served well or not, and the number
Marketing of situations where it cannot are diminishing. So long as customers have smartphones,
Vol. 8 No. 1, 2014
pp. 4-17 data can be gathered from customer to support all these activities.
q Emerald Group Publishing Limited The volumes for accesses and transactions on the internet are large and still
2040-7122
DOI 10.1108/JRIM-07-2013-0046 growing very fast, so that by the time this article is published any figures given here will
be outdated[1]. The internet now hosts a rapidly growing proportion of human dialogue, Interactive,
in ways that are open to viewing and influencing by companies. Ti, combined with the direct and digital
growing reach and capacity of mobile telephone networks, means that dramatic changes
that have taken place in the volumes, frequency and effectiveness of use of the different marketing
media by which companies and customers exchange communication and in the devices
and software used by consumers to exchange communications with companies and
individuals and to organise and enjoy their lives, and the problems companies have in 5
coping with these volumes.
Interactive marketing and its associated analytics, particularly real time high
performance analytics, are opening up new marketing opportunities, leading to improved
marketing return on investment, and then identify why so many companies fail to obtain
the expected benefits[2]. The value of the social approach has been demonstrated in
many markets, e.g. in mobile telephony[3], although one must not overestimate the power
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of social media to engage – hence Don Schultz’s warning (Schultz and Peltier, 2013) that
much social media advertising engages the already engaged.
This interactivity is not only in marketing, sales and service. The “social business”,
deeply connected with its staff and suppliers, knows how to harness its collective
knowledge, using social systems such as Salesforce.com’s Chatter and Microsoft’s
SharePoint, enabling information once locked into one channel or department to be shared
across a company. Logistics and operations flows through a company have become
trackable, constantly, in every process. Non-interactivity and non-trackability will
become the exception rather than the rule.
The difference between situations involving the customer (e.g. testing or buying a
product) and situations involving a corporation’s own people is that while the latter can
be instructed to support interactivity and trackability, customers are independent and
must be motivated to do it. They cannot be told to use a particular device or application
to do it – hence corporations’ interest in how to engage with social and other media
that customers prefer to use.
The terms “Bring Your Own Device” and “Use Your Own Application” challenge a
corporation’s media management teams. Once an organisation is committed to using
all the channels consumers want to use, the main change in the nature of the marketing
game is speed. We have always had to know whether a customer prefers mail,
telephone or face to face, but now we need to know more about their preferences and
their connecting devices to deliver the right content to them at the right time.
“Always on” marketing is differs from “campaign” marketing. The corporation must
develop its people, processes and system capabilities to interact more dynamically with
the consumer, in all channels – hence the use of the term “omnichannel”, referring to
channels customers want to use, rather than “multichannel”, referring to channels
suppliers want to use.
Marketing mix
Branding The locus of many companies’ brands has shifted from the real to the virtual
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world, while the brands of many others are strongly affected by what is said
about them in the virtual world
Product Customer input into product design (collaborative design) can be obtained much
more quickly. Customers can design their own products more easily. Designs can
be tested and revised more quickly, while problems can be identified and rectified
more quickly and easily
Price Prices can be tailored more easily to different customers. Yield management can
be applied in many new areas
Advertising Web site/mobile advertising is gradually usurping advertising in conventional
media, allowing greater trackability and better assessment of return on
investment. This is leading to a blurring of the distinction between advertising
and other marketing communications methods
Direct marketing Direct marketing has expanded out of the conventional media of mail and
telephone to include virtually all marketing communications
Personal selling Personal selling now has much stronger information support, while improved
sales management systems, sometimes integrated with response management
systems, allow much more effective targeting and management of customers and
prospects
Public relations Electronic word of mouth, or “word of mouse”, is replacing conventional media
exposure, not solely through social networks, but through all aspects of web and
mobile dialogue. In some sectors, online reviews have become absolutely critical
in determining whether a product will sell
Sales promotion The effectiveness of sales promotions can be gauged much more
quickly, while online channels facilitate distribution of coupons and other
incentives
Distribution The web has become a very important channel of distribution for many
information-based products and services, as well as some physical products
Marketing management
People Marketing, sales and service people can be much better informed about what they
need to know to sell and market better, and results of their work can be obtained
and distributed more easily
Processes, data Marketing processes can be migrated onto systems, sometimes running on the
and systems “cloud”, enhancing the effectiveness and speed of processes. Systems allow much
better access to data required for decision making on everything from individual
customers to strategic decisions, and then for measurement, review and
Table I. calculation of return on investment
How marketing is Market research Market research is increasing carried out online, while customer-initiated
affected by surge of feedback is providing a new source of information on how customers think,
interactivity feel and act
The problems posed by recent developments Interactive,
There are many studies which demonstrate either the awareness by companies of the direct and digital
problems facing them in dealing with the high volumes of data and/or their admission
that they have a long way to cope with these volumes and use them to achieve marketing
their objectives, for example, The Digital Disconnect: Joining the Dots in the Modern
Media Mix, SAS Institute (2012a, b, c). This paper used the results of the SAS and
Marketing Week Marketing Perspectives 2012 survey in the UK to show that despite 7
huge changes in the available technology, marketers’ mindsets had yet to adapt to the
opportunities this presented, with digital media still approached in the same way as
traditional communications, with channels often used in silos, rather than activity on
one channel triggering or informing communication on another. Failure to exploit the
insight that digital media gives into customers’ needs and sentiments was common.
In other words, there was a sizeable gap between the importance placed on digital
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Primary Operations
Business Inbound
(Production, Outbound Marketing
Functions (Purchasing, Service
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CMO did, and the need for CMOs to do a better job convincing their C-suite colleagues
that marketing is a significant contributor to business value.
A key question raised by Porter was, “What makes for competitive advantage, in the
way the whole corporation works?” Today, we might ask “What is it about a
corporation’s DNA that makes it competitively successful?” The answers to these
questions relates not to a corporation’s strategies or policies, but to its capabilities and
how it deploys them. However, many companies have not even developed one of the
most basic capabilities required for interactive marketing, the single customer view.
As ours and other studies have shown, this is not the case.
integrator of information to ensure that a company stays competitive. Behind this lies
the corporation’s BI, which is defined as a combination of technologies, architectures,
people, processes and methodologies that transform raw data into useful business
information. In marketing, the main BI technologies used are reporting, online
analytical processing, analytics (past and predictive), data and text mining.
A shown in Figure 2, BI usually requires integrating data from many source
systems into a data warehouse, the creation of data models to support that integration
and of metadata definitions (e.g. how an “active customer” is defined using different
variables), analysis, and providing resulting data and analyses to wherever it is
needed, whether by reports or individual data transfers (e.g. data about an individual
customer during a transaction), on whatever platform or device users need.
This figure illustrates the phases through which data (on the left hand side) must
pass before it is translated into insights to support action, The figure gives examples of
Data architecture, quality & Full CDR, clean data, Insight models and service Insight Delivery and Pilot, test, learn, scale
governance single version of truth visualpresentation
Internal
(owned) data Segmentation
Data Cleansing & quality services
A corporation’s ability to determine its BI needs and then implement the required BI is
an essential part of the maturing of BI management and of marketing. Just as
corporations take time to absorb and deploy the best marketing techniques, so they
take time to learn how to develop and use BI.
Work has been carried out on BI maturity by many writers, including Williams and
Thomann (2013) who propose a four stage maturity model that stresses changes in
how information is used, with each stage bringing increasing value, and The Data
Warehousing Institute’s model (Eckerson, 2007), in which maturity is evaluated using
eight areas: scope, sponsorship, funding, value, architecture, data, development and
delivery. Each of the eight aspects is graded with the following five grade scale: infant,
child, teenager, adult, and sage. Gartner’s maturity model for business intelligence
and performance management (Burton, 2007a, b; Hostmann et al., 2006; Rayner and
Schlegel, 2008) has five levels of maturity: unaware, tactical, focused, strategic, and
pervasive. Assessment includes people, processes, metrics and technology. Gartner
shows that many companies’ departments have different maturity levels.
Key aspects of marketing BI maturing are:
.
The development of a strong data culture (commitment to ensuring that the right
BI is available to support decisions and actions).
Remains a We are
significant resolving Already resolved,
problem this issue or not an issue
The biggest challenges with data are [. . .] (%) (%) (%)
on their earlier study of the more general relationship (Nakata and Zhu, 2006). They also
argue that too tight an integration can hamper innovativeness, so that in situations
where rapid innovation is key to competitiveness, it may be better not to insist on too
close an integration. This echoes the familiar complaint of BI people, that “users have
all got their own spreadsheets”. They have them because they deliver what the BI
people cannot!
that show a strong correlation between self-service and good business results? These
questions can only be resolved by partnership between IT and user communities.
However, partnering processes often evolve over years, without careful consideration and
analysis of how well they work and meet the demands of the user community or of the
governance needed to supervise the partnerships. This must change.
Meanwhile, wherever the question “how far should self-service users be allowed to
go” is asked, in circumstances where users are highly motivated to use self-service tools
and where central BI teams are limited in resource (which seems to be the norm!),
then a good strategy is for the central teams to use modern toolsets to provide users with
many different ways of selecting, analysing and forecasting using given data sets,
but for the central BI team to maintain some control over the content of the dataset,
so that the corporation as a whole can be sure of the validity of the results.
.
Purchasing (acquiring the right products for customers and markets).
.
Logistics/supply chain/payment/finance (the flow through the business and
delivery to customer).
.
Process (how efficiently, transparently and speedily things are being managed,
speed to market).
.
Colleagues (how well people are performing, where improvement is most required).
These cover all areas of the Porter value chain model, not just marketing. We have
published an example of how customer management strategies can be articulated
straightforwardly, allowing BI requirements to be articulated in turn (Stone and
Woodcock, 2012).
commercial teams. They also have a role in helping the commercial teams deploy
insights and measure their impact.
Recent research has revealed the shortage of skills and the relatively poor provision in
this area by academic and other educational institutions (Watson, 2012; Wixom et al.,
2011; e-skills UK, 2013). Table II below shows recent research carried out in
conjunction between the Worldwide Federation of Advertisers (WFA) and
The Customer Framework. It illustrates the importance of all of these roles.
in each sector and how this is changing, whether due to changes in CRM technology or in
the underlying product or service technology of the sector in question?
Third, we would like to see some attempt by academics to harness the substantial grey
literature such as that cited in this article to identify likely future trends in the areas being
researched and the future implications of the conclusions academic researchers are
carrying out. Too often, academics researchers’ research is essentially backwards looking,
focusing on questions such as how consumers reacted or behaved when subjected to
particular influences from companies. In areas where developments are rapid, such as
those covered by this article, at least some of the researches carried out by academics are
likely to be out of date by the time they filter through into the world of practitioners
through translation articles. Such an approach would help remedy some of the problems
relating to the academic-practitioner divide signalled by Zahay (2013) and confirmed the
review of internet marketing research carried out by Pomirleanu et al. (2013).
Conclusion
In this article, we have reviewed the rise of interactive marketing as a key capability,
requiring support by advanced BI. As corporations’ interactive marketing becomes
more sophisticated, the BI required to support it must become more advanced, while
marketing users must become more adept at using self-service technology. However,
this carries with it the dangers of all self-service, that users may get things wrong –
hence the need for a mature, well-governed relationship between BI experts and
marketing users. Finally, on the horizon lie developments which may automate the
exploitation of BI, so a new challenge for BI experts and marketing users may be to
move to a higher level, so to speak, by focusing on building automated capabilities for
the use of BI.
Notes
1. For this reason it is better to refer to an online resource for the latest figures – see for
example www.internetworldstats.com/ (accessed 8 December 2013).
2. For a truly excellent summary of developments, see Webber (2013). This article represents the
collective opinion of the editorial board of the journal, celebrating the 25th anniversary of the
Institute of Direct Marketing, for which this is the house journal. For an example of assessment of
the impact of big data, see The SAS Institute (2012b), which quotes an expert prediction that the
amount of data organisations in all sectors have will double every six months, while increasing in
JRIM variety (with big growth in unstructured data), velocity (the speed with which data arrives),
variability (peaks and troughs) and complexity (of hierarchies and linkages).
8,1
3. For an analysis of how churn by one customer is related to churn by many others, and the
consequent importance of analysing network links between customers, whether on social or
telecommunications networks (The SAS Institute, 2012c).
4. For a list of the top 20 affiliate networks, see http://mthink.com/affiliate/ (accessed
16 8 December 2013).
5. A this stage of development of the approach, there is some doubt about how far the use of this
technique will extend, as much depends on its productivity, but also on the understanding by
marketers of how best to use the technique, as highlighted by Shields (2013).
References
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despite-the-big-number-affiliate-marketing-still-has-lots-of-convincing-to-do/4005444.
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Stone, M. and Woodcock, N. (2012), “Simple strategies to win and keep customers profitably”, Journal
of Database Marketing and Customer Strategy Management, Vol. 19 No. 4, pp. 275-285.
Watson, H.J. (2012), “The necessary skills for advanced analytics”, Business Intelligence Journal,
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Webber, R. (2013), “The evolution of direct, data and digital marketing”, Journal of Direct, Data
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Williams, N. and Thomann, J. (2013), BI Maturity and ROI: How Does Your Organization Measure
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Further reading
Stone, M., Woodcock, N. and Foss, B. (2003), The Customer Management Scorecard,
Kogan Page, London.
1. Rafael Barreiros Porto, Fernando Antunes de Abreu. 2018. Investment in online advertising and return on
sales: Does it pay to outsource the services to an advertising agency?. Journal of Marketing Communications
27, 1-18. [Crossref]
2. ArrigoElisa, Elisa Arrigo. 2018. Social media marketing in luxury brands. Management Research Review
41:6, 657-679. [Abstract] [Full Text] [PDF]
3. Julian M. Müller, Benjamin Pommeranz, Julia Weisser, Kai-Ingo Voigt. 2018. Digital, Social Media, and
Mobile Marketing in industrial buying: Still in need of customer segmentation? Empirical evidence from
Poland and Germany. Industrial Marketing Management . [Crossref]
4. José Bessa, Frederico Branco, António Rio Costa, Ramiro Gonçalves, Fernando Moreira. Proposal of a
BI/SSBI System for Knowledge Management of the Traffic of a Network Infrastructure – A University
of Trás-os-Montes e Alto Douro Case Study 678-690. [Crossref]
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