Live @ Information On Demand 2012: Smarter Marketing Analytics

Big Data is the digital convergence of structured and unstructured data. Those organizations that can capture and analyze their data, regardless of what type, how much, or how fast it is moving, can make more informed decisions. At Information On Demand 2012 today in Las Vegas, IBM announced a new digital marketing system to help CMOs conduct smarter marketing analytics.

The news dam has begun to break at the IBM Information On Demand And Business Analytics Forum here in Vegas.

One of the highlights of today’s announcement was IBM’s unveiling of a new digital marketing system and big data software designed to help organizations gain actionable insights.

These tackle the most pressing big data challenges facing organizations today — accessing and gaining intelligence into an enormous stream of data generated from mobile, social and digital networks.

Big Data for Chief Marketing Officers 

The emergence of big data technologies is driving the transformation of marketing for every channel. Chief Marketing Officers (CMOs) are now responsible for analyzing consumer demands from social media, mobile devices, and traditional channels and align these demands with product development and sales.

The new IBM Digital Analytics Accelerator helps CMOs tap into consumer sentiment to create targeted advertising and promotions, avoid customer churn, and perform advanced Web analytics that predict customer needs.

Now, CMOs can bring advanced analytics to all their social media, web traffic, and customer communication behind their own firewall.

The industry’s first big data solution in the digital marketing arena is powered by Netezza and Unica technologies. With this integrated offering that includes the recently announced PureData System for Analytics, clients can run complex analytics on petabytes of data in minutes, and arm marketing professionals with instant insights.

CMOs can use new insights to accelerate marketing campaigns and better meet consumer needs based on the broadest range of data.

Trident Marketing: Gaining Visibility Into Consumer Behaviors

For Trident Marketing, a direct response marketing and sales firm for leading brands such as DIRECTV, ADT and Travel Resorts of America, performing analytics on big data has helped the company gain unprecedented visibility into consumers — from predicting the precise moment in which to engage with customers to anticipating the likelihood a customer will cancel service.

Working with IBM and partner Fuzzy Logix, the company has realized massive growth including a tenfold increase in revenue in just four years, a ten percent increase in sales in the first 60 days, and decreased customer churn by 50 percent.

IBM Global Chief Marketing Officer Study: From Prime Time To Real Time

As a marketer for IBM who specializes in the digital realm, I was excited to hear about the pending IBM 2011 Global Chief Marketing Officer study, a study of more than 1,700 chief marketing officers from 64 countries and 19 industries, and couldn’t wait to see the results.

The wait is over.

Today, IBM released the results of this important study, one that reveals that the majority of the world’s top marketing executives recognize there’s a critical and permanent shift occurring in the way they engage with their customers, but who also question whether their marketing organizations are prepared to manage the change.

Click to enlarge. The vast majority of CMOs surveyed in the IBM 2011 CMO Study indicated that they are underprepared to manage the impact of key changes in the marketing arena.

Some other initial headlines: The study reveals that the measures used to evaluate marketing are changing. Nearly two-thirds of CMOs think return on marketing investment will be the primary measure of the marketing function’s effectiveness by 2015.

But even among the most successful enterprises, half of all CMOs feel insufficiently prepared to provide hard numbers.

Most of these executives — responsible for the integrated marketing of their organization’s products, services and brand reputations –- say they lack significant influence in key areas such as product development, pricing and selection of sales channels.

The IBM study found that only 26 percent of CMOs are tracking blogs, 42 percent are tracking third party reviews and 48 percent are tracking consumer reviews to help shape their marketing strategies.

“The inflection point created by social media represents a permanent change in the nature of customer relationships,” said Carolyn Heller Baird, CRM research lead for the IBM Institute for Business Value and the global director of the study.  “Approximately 90 percent of all the real-time information being created today is unstructured data. CMO’s who successfully harness this new source of insight will be in  a strong position to increase revenues, reinvent their customer relationships and build new brand value.”

An Ever-Changing Marketing Landscape, An Empowered Consumer

Customers are sharing their experiences widely online, giving them more control and influence over brands.

This shift in the balance of power from organizations to their customers requires new marketing approaches, tools and skills in order to stay competitive.  CMOs are aware of this changing landscape, but are struggling to respond.  Four out of five CMOs expect that they will have to make fundamental changes to traditional methods of brand and product marketing.

Baird likened marketers who underestimate the impact of social media to those who were slow to view the Internet as a new and powerful platform for commerce.

Like the rise of e-business more than a decade ago, the radical embrace of social media by all customer demographic categories represents an opportunity for marketers to drive increased revenue, brand value and to reinvent the nature of the relationship between enterprises and the buyers of their offerings.  Marketers who establish a culture receptive to deriving insight from social media will be far better prepared to anticipate future shifts in markets and technology.

As someone who has been intimately involved in helping IBM make a successful transition into providing enhanced social intelligence for marketers here inside Big Blue, this is music to my ears.

While CMOs identify customer intimacy as a top priority, and recognize the impact of real-time data supplementing traditional methods of channel marketing and gathering market feedback, most CMOs say they remain mired in 20th century approaches.

Eighty-percent or more of the CMOs surveyed are still focusing primarily on traditional sources of information such as market research and competitive benchmarking, and 68 percent rely on sales campaign analysis to make strategic decisions.

Click to enlarge. CMOs surveyed in the study indicated they are overwhelmingly underprepared for the data explosion and recognize need to invest in and integrate technology and analytics.

Managing the Four Challenges

Collectively, the study findings point to four key challenges that CMOs everywhere are confronting. The explosion of data, social media, channel and device choices and shifting demographics will be pervasive, universal game changers for their marketing organizations over the next three to five years.  But a large majority of CMOs feel unprepared to manage their impact.

• Data explosion:  Every day we create 2.5 quintillion bytes of data – so much that 90 percent of the world’s data today has been created in the last two years alone.  The increasing volume, variety and velocity of data available from new digital sources like social networks, in addition to traditional sources such as sales data and market research, tops the list of CMO challenges.  The difficulty is how to analyze these vast quantities of data to extract the meaningful insights, and use them effectively to improve products, services and the customer experience.
• Social platforms:  Social media enables anyone to become a publisher, broadcaster and critic.  Facebook has more than 750 million active users, with the average user posting 90 pieces of content a month.  Twitter users send about 140 million tweets a day.  And YouTube’s 490 million users upload more video content in a 60-day period than the three major U.S. television networks created in 60 years.  Marketers are using social platforms to communicate – with 56 percent of CMOs viewing social media as a key engagement channel – but they still struggle with capturing valuable customer insight from the unstructured data that customers and potential customers produce.
• Channel and device choices:  The growing number of new marketing channels and devices, from smart phones to tablets, is quickly becoming a priority for CMOs.  Mobile commerce is expected to reach $31 billion by 2016, representing a compound annual growth rate of 39 percent from 2011 to 2016.  Meanwhile, the tablet market is expected to reach nearly 70 million units worldwide by the end of this year, growing to 294 million units by 2015.
• Shifting demographics:  New global markets and the influx of younger generations with different patterns of information access and consumption are changing the face of the marketplace.  In India, as one example, the middle class is expected to soar from roughly 5 percent of the population to more than 40 percent in the next two decades.  Marketers who have historically focused on affluent Indian consumers must adapt their strategies to market to this emerging middle class.  In the United States, marketing executives must respond to the aging baby boomer generation and growing Hispanic population.

Lack of Influence

Today’s CMOs have to cover more ground than ever before.  They have to manage more data from disparate sources, understand and engage with more empowered customers, adopt and adapt to more sophisticated tools and technologies – while being more financially accountable to their organizations.

Click to enlarge. CMOs surveyed believe that they can expand their personal influence by shifting to new capabilities that focus on technology, social media and ROI.

In fact, 63 percent of CMOs believe return on investment (ROI) on marketing spend will be the most important measure of their success by 2015.  However, only 44 percent feel fully prepared to be held accountable for marketing ROI.

Most CMOs have not traditionally been expected to provide hard financial evidence of their ROI.

But given the current economic volatility and pressure to be profitable, organizations can no longer afford to write a blank check for their marketing initiatives. CMOs recognize they now need to quantify the value they bring to the business, be it from investing in advertising, new technologies or any other activity.

This increasing emphasis on ROI also reflects the scrutiny the marketing function is currently attracting, itself a reflection of the function’s growing prominence.  Today’s CMOs are in much the same position as chief financial officers (CFOs) were a decade ago, when their role was evolving from guardian of the purse strings to strategic business adviser.

If CMOs are to be held responsible for the marketing returns they deliver, they must also have significant influence over all “Four Ps”: promotion, products, place and price.  The study found that this is often not the case.

CMOs say they exert a strong influence over promotional activities such as advertising, external communications and social media initiatives.  But, in general, they play a smaller role in shaping the other three Ps.  Less than half of the CMOs surveyed have much sway over key parts of the pricing process, and less than half have much impact on new product development or channel selection.

To meet these new challenges, CMOs must boost their own digital, technological and financial proficiency –- but many seem surprisingly reticent in this respect.  When asked which attributes they will need to be personally successful over the next three to five years, only 28 percent said technological competence, 25 percent said social media expertise and 16 percent said financial acumen.

About the Global CMO Study

The 2011 IBM Global Chief Marketing Officer Study is IBM’s first study of CMOs — and the fifteenth in the ongoing series of C-suite Studies developed by the IBM Institute for Business Value.

Between February and June 2011, IBM met face to face with 1,734 CMOs in 19 industries and 64 countries to better understand their goals and the challenges they confront.  The respondents came from a wide variety of organizations, ranging from 48 of the top 100 brands listed in the 2010 Interbrand rankings to enterprises with a primarily local profile.

Click here to register and receive your copy of the IBM 2011 Global Chief Marketing Officer study.

IBM’s Smarter Commerce In The Cloud

I’m still shaking my head over the Netflix debacle.  Apparently so are a lot of the rest of you!

But, I’ll be honest: I’m not giving up on them.  Not yet.  I still like the streaming offering too much and enjoy their deeper catalogue of foreign flicks (but ask me again in the New Year after their Starz deal is set to expire!).

Meantime, IBM is bringing to market a new solution featuring cloud and on-premise offerings that will help organizations respond automatically to shifting consumer and business trends.

These new solutions, Commerce-as-a-Service and Social Media Marketing, combined technology from key acquisitions such as Unica, Coremetrics, and Sterling Commerce with IBM research and development.

These new software solutions are designed to help companies intelligently automate supplier and trading partner interactions, automatically turn marketplace insights into marketing and sales actions and connect online, mobile and social channels to physical stores.

With its Smarter Commerce initiative, IBM is defining and leading a new market that it estimates to be worth $20 billion in software alone.  Smarter Commerce transforms how companies manage and adapt to customer and industry trends such as online, social and mobile shopping and purchasing.

The new offerings introduced today include:

The Commerce-as-a-Service, which accelerates and extends the delivery of Smarter Commerce capabilities with:

• A Cloud-based Configure, Price, Quote offering that simplifies the “quote-to-cash” process by allowing clients to quickly drive new revenue streams by bundling offers automatically.
• A Cross-Channel Selling offering which connects Web store fronts to mobile devices, social networks and other channels. This enables companies to generate new revenue streams by connecting products offered online to in-store purchasing and delivery.  This software is optimized for IBM POWER7 Systems, allowing high-volume retailers to personalize customers’ online shopping experiences, and handle online sales surges during peak shopping seasons without loss of performance. In addition, the systems integrate customer buying information across all sales channels, including online, mobile, in-store, POS and kiosks.
• A Payments & Settlement solution that delivers a highly flexible and secure PCI compliant payment capability at customer checkout.
• A Supplier Integration & Management offering that connects and automates supplier interactions, providing clients with a dashboard view of activity as it happens.
• A Cloud-based File Transfer capability for moving large customer and partner data within and across businesses to support critical commerce needs faster and more efficiently.

Social Media Marketing, which delivers deep analysis of natural language processing of consumer sentiment in social media. This allows customers to receive tailored, one-to-one marketing offers automatically in real time.

IBM has enhanced its cloud-based Digital Marketing Optimization offering by adding a digital data exchange for the tagging, collection and syndication of customer data. IBM is also adding capabilities to more simply analyze multiple enterprise Web sites and speed the ability to optimize email communications and reporting from creation, to deployment, to social sharing.

New Smarter Commerce Consulting Services

IBM today also announced the launch of a new Global Center of Competence for Smarter Commerce.  The new Center of Competence will be part of IBM Global Business Services and is comprised of highly skilled Smarter Commerce consulting experts who will help clients worldwide solve their most complex buying, marketing, selling and servicing business problems.

For more information on IBM Smarter Commerce go here.

Newspeak

All Facebook is reporting that Facebook has called an all-hands come-to-Jesus meeting on the subject of privacy for later this afternoon.

I can only wonder aloud to myself whether or not anyone will be channeling the late George Orwell, but as someone who works for a company which was once targeted as the consummate Big Brother in a 1984 TV spot by the (at the time) upstart competition, I can only say to Facebook “Good luck with that.”

Of course, there’s much more at stake with Facebook’s recent moves than the simple erosion of our privacy. 

An underlying philosophical approach to the future of the cloud as a platform the evolution of marketing is at stake, and one in which, at least for Facebook, personal interests and information become the lubricant that keeps all the moving pieces humming, and paves the way for a post-modern marketing future that could make the moving eye billboards in “Minority Report” seem innocuous.

They’ve been here before. 

First in 2006 with the advent of their Newsfeed (which later proved to be THE killer app that set the stage for Facebook’s hockey stick growth), and later with Beacon (the ad-serving network Facebook announced which was to send info from other websites back to the FB mother ship — which they were compelled to withdraw after a public outcry).

With the advent of Social Plug-Ins and the new Open Graph API, and the move to turn pieces of personal information into interoperable Lego pieces that would serve as key bricks in their new grand social graph design, many seem to be suggesting Facebook has gone one opt-in too far.

Or was that opt out?

All I know is that in 1984, when George Orwell painted a picture of a grand dystopian vision in which the government exerts complete control, he didn’t have the opportunity for using the commercial Internet as part of his palette. 

If he had, Everyman Winston Smith might soon have found himself trying to hack his way out of the Open Graph instead of trying to eliminate an unperson.

But the doublethink here is that the big picture looming behind Facebook’s architectural disruptions actually could bring about some good.  

The ability to “Like” on a grand scale could bring together large groups of like-minded people together with great efficiency, and depending on the granted consumer privacy controls, even with some PII friendliness.

To which one must ask the logical question, then what? 

Would our collective like-mindedness lead us to some positive outcomes and groupthink, or might it instead evolve us into a massive collective of whining counterparties, a global divide consisting of Jets on one side, and Sharks on the other?

Can we all just get along? 

Perhaps, perhaps not. 

But unless the noble, and controversial, Facebook experiment is allowed to continue unabated – preferably with dramatically increased control over the use of our personal information, not to mention some easy to use instructions — we may never gain a glimpse into the upside opportunity that may have lain behind Orwell’s imagined telescreen.

And if we are destined to a dystopian Big Brother future, ought not we be the ones helping to determine Facebook’s grand plan as to who’s watching and when?

I don’t think George Orwell would have had it any other way.