Data, Data Driven Marketing

What is Data-Driven Marketing?

TV shows like AMC’s wildly popular “Mad Men” lead people to believe that marketing and advertising are successful due to insanely intelligent and often inspired creative geniuses like Don Draper. If your company doesn’t have a Don Draper leading your creative charge, don’t worry. The saying still holds true, you can’t always believe everything you see on TV. While marketing as a field does require a good measure of creativity, successful marketing is always based on data. So let’s discuss the refined and intelligent approach to marketing: Data-Driven Marketing.

What is Data-Driven Marketing?

To define Data-Driven Marketing, let’s start with an example. Company XYZ produces a diet product that helps people achieve their weight-loss goals. The product has been successful in its initial launch with local markets, so Company XYZ looks to launch a regional or national based campaign. A few different approaches can be taken:

Shotgun Marketing Approach

A shotgun marketing approach is much like shooting a shotgun. The goal is less about precise targeting and more about scattering your marketing materials as wide as possible in hopes of hitting something. Like a shotgun, this approach has a wider reach, but a lower impact and stopping power. The important thing to remember here is that you don’t want high reach metrics you want dollars. Reaching more of the wrong people will not equate to more dollars. For example, if you are selling diet products and your message is landing in the inbox of people with no interest in or history of consuming diet products, your chances of converting them are much lower. With its focus on reach alone, the shotgun method will lead to lower ROI on marketing dollars and higher costs for the organization.

Assumption-Based Marketing Approach

Do you know what happens when you assume something?

Assumption-based marketing is the process of making assumptions (or guesses) of the demographics that are most likely to purchase your product. With the example of a diet product, one might assume that the target audience consists of single females ages 18-24 with moderate to high income and interest in fashion. Based on these assumptions, one could use targeting tools to send a campaign to this demographic. The cost of this approach will be lower than the shotgun approach, people you want to see your message will see it. Remember though, this approach is based on the assumptions of the marketing/sales team of who the customer is, or might be. What if you are wrong? What if the people you want to see your marketing message are not the people that are actually likely to buy your product? Assumption-based marketing is a gamble.

Data-Driven Marketing Approach

This approach begins by analyzing existing customer data. By looking at actual customer data, you can get a better picture of who your actual customer is. If your customer file doesn’t have enough information to truly understand who your customer is, you can use a company like ANS to append more relevant demographic, socioeconomic, and psychographic data to your current customer file. The modeled data is can then be used to create a customer profile representing who your customer really is. After thorough analysis, a campaign can be created to target consumers that match the customer profile. The resulting audience will be much smaller, but highly targeted and based on real data.

While the shotgun approach will lead to reaching a greater number of people, it will not help the company to increase ROI or profit. In fact, you are more likely to lose money with this approach. The high cost of acquisition with this approach can outweigh the revenue generated from it. Marketing messages also have to be generalized making them less personal for each consumer that sees it.

An Assumption-based approach will personalize the marketing message to the assumed target, but basing marketing on assumptions is a gamble. While you could be successful, if your assumptions are off then your campaign will fail. With the assumption-based approach, you essentially guess who you should target, then hope you are right. This is not intelligent marketing.

Back to our example. With a Data-Driven Marketing approach Company XYZ gains the following insights from an analysis of existing customers:

Customer Profile

  • Marital Status: Single
  • Age: 27-34
  • Gender: 87% Male; 13% Female
  • Income: $50,000 – 75,000
  • Interests: Sports, Fitness, etc.

This is just a fraction of the information available when creating a customer profile. With this information, Company XYZ now understands who their customer really is. While their product may work for everyone, marketing to everyone is expensive. Marketing to individuals outside their true target audience would mean that marketing dollars would be spent on consumers that are less likely to buy. However, by using the customer profile Company XYZ is able to launch a Data-Driven Marketing campaign targeting single men ages 27 to 34 with an income of $50,000-75,000 and interests in sports and fitness. This targeted approach will yield a much higher ROI of their marketing spend. It is the data that drives the decision on who to target and helps to craft a custom message for that demographic. This is what Data-Driven Marketing means.

Data-Driven Marketing with ANS

At ANS, we use state-of-the-art technology to partner with our clients to analyze, model, and draw valuable insights from their customer data. The customer profile we provide helps our clients to make Data-Driven Marketing decisions that lead to increased conversion rates and higher ROI. By partnering with ANS, you can say goodbye to the day of pulling the trigger on your marketing shotgun. Instead, you’ll be using valuable insights based on data to drive your marketing decisions and refine your messaging. Data-Driven Marketing is more intelligent marketing. Contact us today for more information.

This article was written by David Fiso, Digital Media Manager at ANS.

data-driven marketing, marketing strategy


Leave a Reply

Your email address will not be published. Required fields are marked *