What is Data-Driven Marketing?

Posted on September 6, 2019 by Jared Harrington

Consumers and businesses produce an unfathomable amount of data each day.

Each search, purchase and interaction, whether it occurs online, in a brick-and-mortar store or some other way, contributes to this over-abundance of data. The Big Data industry has sprung up as a direct result of this data generation, giving companies a way to process this data and develop patterns and other useful information out of the mass of raw data.

This data, and the ability to extract useful information from it, is one of the most powerful tools available to digital marketers and their clients. By utilizing data-driven marketing properly, you can optimize the targeting of digital marketing campaigns, employ more personalized messaging tactics and pinpoint the marketing tactics that will be most effective for a given audience.

Defining data-driven marketing

To understand what makes data-driven marketing so powerful, it is important to understand exactly what data-driven marketing is.

At its most basic level, data-driven marketing is a marketing strategy that’s built around the information that you receive from Big Data analysis. The data being analyzed comes from purchases, interactions and engagements made by your target consumer group, and the data sample is significant enough that it allows you to not only track past behaviors, but also to make predictions about future behaviors.

By using the data as a guide, marketers and their strategists can more accurately target their ideal audience on digital platforms and prepare for how those consumers are likely to react. This ability not only creates more efficient advertising but also provides more opportunities for customization and personalization in the sales funnel.

Data-driven marketing advantages

Because of the degree of insight that data-driven marketing provides, there are some definite advantages to incorporating it into your marketing strategies.

Here are just a few of the ways that Big Data analysis and data-driven tactics can improve your marketing effectiveness:

  • Better personalization: Because data-driven marketing uses Big Data analysis, you have a clearer view of your target audience’s likes and habits. This allows you to better personalize ads to pique their interest.
  • More focused targeting: Given the size of the data samples that produce the analysis data-driven techniques are built around, you can more easily identify the most effective, actionable items to better target ads for your desired audience.
  • Need-based advertising: Consumers respond better to advertisements that they feel will fill a need or solve a problem. Data analysis helps you to more accurately identify these needs, wants and pressing issues, informing your ad campaigns and making them more likely to draw the attention of your target audience.
  • Multi-channel marketing: Data-driven marketing can target consumers across multiple channels more effectively by providing insight into which channels target audiences are most likely to respond to or engage with. These insights provide options for new or different types of marketing pushes to increase targeting effectiveness across channels.
  • Improved relevancy: Not only can data-driven marketing increase the relevancy of advertisements to targeted consumers, but effective campaigns can influence product relevancy as well. By targeting the desired audience with highly relevant marketing campaigns, some members of that audience may reevaluate the importance of the product or service being sold and decide that it is more important than previously imagined.

There are a number of other advantages to using data-driven strategies in your marketing plans as well. In the end, however, the question is not whether you should employ data-driven strategies in your marketing plans but how.

Employing data-driven tactics

Data-driven marketing developed out of the push toward automation in digital marketing.

The information gained from data analysis is used to develop automation targeting strategies.  This is especially useful in multi-platform marketing where the data not only guides the overall automation strategy but also allows it to more accurately adapt to the idiosyncrasies of each platform.

Data-driven marketing should embrace the diversity of your target audience and allow for the precise targeting of multiple subgroups within that audience through automated placements. While the larger message is targeted at the audience as a whole, variations in the language and other details can help the overall message to better appeal to these subgroups. This ability to drill down into these finer details increases the overall efficiency of your marketing efforts and can even improve brand loyalty as consumers within these subgroups notice the apparent effort of focusing digital marketing on them specifically.

Given the enormity of the data collected on consumers, ongoing testing may be required to fine-tune your data-driven marketing approach. These test campaigns should be targeted toward a much smaller audience, and feedback from the tests can then be applied to your larger target group. By using automation and data analysis, these tests can run fairly easily and can be updated as needed to try out and adjust new tactics that you plan to use in the future.

The future of data-driven marketing

As digital marketing continues to grow in popularity among businesses and advertising agencies, data-driven tactics will become an increasingly common way to focus in on very specific marketing targets.

Advances in artificial intelligence and data analysis algorithms will also make the information gleaned from consumer-generated data much more relevant to the needs of marketers. Though data-driven marketing has already had a major impact on the digital marketing space, its influence is only going to expand and grow as time goes on.

Data-driven marketing is going to continue to change the way that marketers operate. Other technologies such as marketing automation will continue to evolve so as to better incorporate data-driven tactics in future campaigns. It likely isn’t an exaggeration to say that in time, data-driven marketing will be the de facto form of marketing across most digital platforms.

Given the speed at which the marketing world is embracing it, that time may not even be that far away.

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