The amount of data about a business’ customers and target customers that can be mined for valuable insights with marketing analytics tools is growing exponentially. And not merely in corporate databases, data warehouses and customer relationship management (CRM) systems. Increasingly, much of the information is public -- out there on the Web for all to see -- or semi-public, residing on social networks like Facebook and Twitter.
For many marketing departments, it sounds like a dream come true. At long last, they have at their fingertips the information they need to gauge -- often in real time -- the sentiments, needs, gripes and behaviours of those whose custom they court. In some industry sectors, harnessing that data offers the tantalising prospect of helping organisations turn their customers into co-promoters of the brand (and even co-creators of products and services). But something’s stopping most of them from doing so -- and in many cases, it seems that something is their own IT departments.
Clive Longbottom, service director at UK-based analyst firm Quocirca, said too many IT departments are fobbing off marketing folk with the latest “Facebook/Twitter-ready” solution from whichever vendor happens to be their incumbent supplier of business intelligence (BI) software. “They say, ‘Here you go, have a copy of SAS/Business Objects/Hyperion/Cognos/et cetera -- that’ll do everything for you,’ and tell them to go away,” Longbottom said.
This, he thinks, leaves marketing departments in an invidious position. “They have the capability to do what they’ve always wanted -- to be more opportunistic and inventive in their approach and use all the media available to them -- but they’re not getting the necessary help from IT,” he said.
Not aiding marketing analytics cause
The fault, however, does not lie with the IT department alone -- the BI and analytics industry itself is also to blame. Just as with previous major trends such as the advent of the Web and the move to virtualised environments, vendors have been slow to adapt to the new order of vast swathes of unstructured and semi-structured online data, and how that information might be utilised. In addition, the available technology is extremely fragmented.
“Very few companies will monitor social networks and pull information out for you in a form that can be readily analysed,” Longbottom said. “Some tools let you push information out and might, if you’re lucky, monitor the responses. Others search for mentions of a particular name or tag, which is fine if you have a unique name but harder when it’s something more generic. But few vendors, if any, can take a fully holistic view of all this information and pull it all together for you. Frankly, it’s a mess.”
Now Salesforce are pushing Radian6 as a kind of ‘social sentiment hub,’ they will go after chief marketing officers and the like
Ian Cohen, CIO at Jardine Lloyd Thompson
The market is, however, evolving. Salesforce.com, the big daddy of cloud-based CRM, has introduced the capability to feed data in and out of social networks. Longbottom also expects other major CRM vendors to gain similar capabilities by acquiring smaller players with suitable offerings. “Oracle has bought RightNow, for example, which has been putting in place some of this stuff,” he said. He also pointed to smaller, specialist vendors that focus on information analysis and enterprise feedback, such as Recommind and ConfirmIT. Those companies “are doing things to integrate social network data, although they’re not really geared up for campaign management or marketing at the moment,” Longbottom noted. “So the market is very piecemeal.”
Seducing marketing behind IT’s back
In such an environment, if marketing departments are to steal a march on their competitors and gain better insights from a greater range of internal and external data, they need IT’s help to understand the capabilities of the tools on offer and deploy and use them effectively. But some chief information officers (CIOs) suspect vendors will increasingly target marketing departments directly with their offerings. “It will undoubtedly be a problem for some [organizations],” said Ian Cohen, CIO of financial risk management firm Jardine Lloyd Thompson. “For example, I’m guessing that now Salesforce are pushing Radian6 as a kind of ‘social sentiment hub,’ they will go after chief marketing officers and the like.”
Chances are, such approaches will only serve to exacerbate conflict between the IT and marketing functions. At the moment, many marketing chiefs are frustrated by the speed and quality of information IT is able to provide. Lance Mercereau, head of marketing at Rosslyn Analytics, said: “Our IT department has created some nifty reports that provide better insight in terms of who visits our website and downloads apps from our site and those of our partners. The challenge is that IT is always stretched, so requesting new fields or data points to analyse takes time. Yet marketers need more immediacy to be able to respond to the market effectively.”
Mercereau added that he wants to see easier-to-use marketing analytics tools “that enable me to extract, improve and analyse data almost in real time. At the moment, tools are difficult to use or I have to wait on someone else to provide the data for me to analyse.”
The risk factor in marketing analytics
One of the major causes of internal conflict over the use of data analytics stems from the differing priorities of marketing departments and those responsible for managing organisational and risk. Behavioural analytics startup Featurespace sells into both markets -- its products can be used on the marketing side to predict the value of particular customers to the business and the products and services that are likely to appeal to them. Equally, they can be used by risk departments to look for patterns indicating fraud or other abnormalities, for example.
It takes time to build trust between the two groups (I’ve seen it take years), especially if they have a history of warring with each other
Graham Oakes, governance author
David Excell, founder and CEO, said: “Marketing departments are incentivised by getting the maximum number of customers and growing revenue. Risk departments are almost the opposite -- they’re trying to minimise risk by excluding certain potential customers.”Excell does sense a change, however. “A lot of risk decisions we’ve seen in the past have been very black and white. Now companies want to manage risk in a more ‘greyscale’ way -- accepting customers within certain limits and revising how you’re prepared to interact with them as you learn more about them. Today’s technologies allow you to do this in a scalable way without armies of analysts,” he said.
While this conflict -- between marketing and risk specialists, who may include information security staff -- might seem a specialized instance that proves resolvable by technological development, a more general technology acquisition frustration among marketers is causing them to source their own standalone or cloud-based data analytics systems. Often this is, indeed, without understanding the potential implications for the rest of the business in areas such as data security, risk management, interoperability and the impact on future technology strategy and capabilities. All of those issues are core to the IT function, and many IT executives worry about ceding control over them.
For example, at a recent meeting of some of the country’s most senior CIOs organised by the Winmark CIO Network (and conducted under the Chatham House Rule, which prevents their identities being revealed), one delegate said, “Typically, it’s the people who are well-versed in technology that know how to keep the funnel of innovation open, and there aren’t many people at the senior level of the business who can make those decisions.”
IT to business: ‘We need to talk’
Another CIO at the meeting said: “To me, the power comes from the convergence of data and analytics, together with mobile [technology], social media and the explosion in the volume and pace of information. There’s a real debate to be had about how this will become more relevant to the business.”
Many top CIOs are successfully changing the nature of their role to become more of a “trusted adviser” to marketing and other departments -- guiding technology decisions and helping business executives think about the implications of those decisions without being as prescriptive as in the past. But for others, especially those beneath the top tier, resolving the IT-business conflict in areas such as marketing analytics likely won’t be easy.
Independent governance author Graham Oakes said organisations need to ensure that they have some kind of relationship manager able to talk the language of both IT and marketing. “That could be an IT person who can talk in terms of the big picture, or perhaps a marketing person who likes to delve into details,” Oakes said. “But it takes time to build trust between the two groups -- I’ve seen it take years -- especially if they have a history of warring with each other.”
Jim Mortleman is an independent writer and commentator with more than 20 years' experience covering new technologies and their implications for business and society.