Investigation into Big Data Impact on Digital Marketing

The increased accessibility of digitally sourced data and advance technology to analyse it drives many industries to digital change. Many global businesses are talking about the potential of big data and they believe that analysing big data sets can help businesses derive competitive insight and shape organisations’ marketing strategy decisions. Potential impact of digital technology varies widely by industry. Sectors such as financial services, insurances and mobile telecommunications which are offering virtual rather than physical products are more likely highly susceptible to digital transformation. Howeverthe interaction between digital technology and organisations is complex and there are many barriers for to effective digital change which are presented by big data. Changes brought by technology challenges both researchers and practitioners. Various global business and digital tends have highlights the emergent need for collaboration between academia and market practitioners. There are “theories-in – use” which are academically rigorous but still there is gap between implementation of theory in practice. In this paper we identify theoretical dilemmas of the digital revolution and importance of challenges within practice. Preliminary results show that those industries that tried to narrow the gap and put necessary mechanisms in place to make use of big data for marketing are upfront on the market.  Advances in digital technology has made a significant impact on marketing theory and practice. Technology expands the opportunity to capture better quality customer data, increase focus on customer relationship, rise of customer insight and Customer Relationship Management (CRM). Availability of big data made traditional marketing tools to work more powerful and innovative way. In current digital age of marketing some predictions of effects of the digital changes have come to function but still there is no definite answer to what works and what doesn’t in terms of implementing the changes in an organisation context. The choice of this specific topic is motivated by the need for a better understanding for impact of digital on marketing fild.This paper will discusses the potential positive impact of the big data on digital marketing. It also present the evidence of positive views in academia and highlight the gap between academia and practices. The main focus is on understanding the gap and providing recommendation for fillingit in. The aim of this paper is to identify theoretical dilemmas of the digital revolution and importance of challenges within practice. Preliminary results presented here show that those industries that tried to narrow the gap and put necessary mechanisms in place to make use of big data for marketing are upfront on the market. In our discussion we shall identify these industries and present evaluations of which industry sectors would need to be looking at understanding of impact that big data may have on their practices and businesses. Digital Marketing and Big data In early 90’s when views about digital changes has started Parsons at el (1998) believed that to achieve success in digital marketing consumer marketers should create a new model with five essential elements in new media environment. Figure below shows five success factors and issues that marketers should address around it.  Digital marketing Framework and levers Parson et al (1998) International Conference on Communication, Media, Technology and Design 24 26 April 2014, Istanbul – Turkey 147 Today in digital age of marketing some predictions of effects of this changes have come to function but still there is no define answers on what works and what doesn’t in terms of implement it in organisation context.S. Dibb (2012). There are deferent explanations, arguments and views about impact of digital on marketing strategy in the literature. At first, it is important to define what is meant by digital marketing, what are the challenges brought by it and then understand how it is adopted. Simply, Digital Marketing (2012) can be defined as “a sub branch of traditional Marketing using modern digital channels for the placement of products such as downloadable music, and primarily for communicating with stakeholders e.g. customers and investors about brand, products and business progress”. According to (Smith, 2007) the digital marketing refers “The use of digital technologies to create an integrated, targeted and measurable communication which helps to acquire and retain customers while building deeper relationships with them”. There are a number of accepted theoretical frameworks however as Parsons et al (1998) suggested potentialities offered by digital marketing need to consider carefully where and how to build in each organisation by the senior managers. The most recent developments in this area has been triggered by growing amount of digital data now known as Big Data. Tech American Foundation (2004) defines Big Data as a “term that describes large volumes of high velocity, complex and variable data that require advanced techniques and technologies to enable the capture storage, distribution, management and analysis of information”. D. Krajicek (2013) argues that the big challenge of Big Data is the ability to focus on what is meaningful not on what is possible, with so much information at their fingerprint marketers and their research partners can and often do fall into “more is better” fallacy. Knowing something and knowing it quickly is not enough. Therefore to have valuable Big data it needs to be sorted by professional people who have skills to understand dynamics of market and can identify what is relevant and meaningful. G. Day (2011). Data should be used for achieve competitive advantage by creating effective relationship with the target segments. According to K. Kendall (2014) with de right capabilities, you can take a whole range of new data sources such as web browsing, social data and geotracking data and develop much more complete profile about your customers and then with this information you can segment better. Successful Big Data initiatives should start with a specific and clearly defined business requirement then leaders of these initiatives need to assess the technical requirement and identify gap in their capabilities and then plan the investment to close those gaps (Big Data Analytics 2014) The impact and current challenges Bileviciene (2012) suggest that well conducted market research is the basis for successful marketing and well conducted study is the basis of successful market segmentation. Generally marketing management is broken down into a series of steps, which include market research, segmentation of markets and positioning the company’s offering in such a way as to appeal to the targeted segments. (OU Business school, 2007) Market segmentation refers to the process of defining and subdividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment (Business dictation, 2013). The goal for segmentation is to break down the target market into different consumers groups. According to Kotler and Armstrong (2011) traditionally customers were classified based on four types of segmentation variables, geographic, demographic, psychographic and behavioural. There are many focuses, beliefs and arguments in the field of market segmentation. Many researchers believe that the traditional variables of demographic and geographic segments are out-dated and the theory regarding segmentation has become too narrow (Quinn and Dibb, 2010). According to Lin (2002), these variables should be a part of a new, expanded view of the market segmentation theory that focuses more on customer’s personalities and values. Dibb and Simkin (2009) argue that priorities of market segmentation research aim to exploring the applicability of new segmentation bases across different products and contexts, developing more flexible data analysis techniques, creating new research designs and data collection approaches, however practical questions about implementation and integration have received less attention. According to S. Dibb (2012) in academic perspective segmentation still has strategic and tactical role as shown on figure below. But in practice as Dibb argues “some things have not changed” and: Segmentation’s strategic role still matters Implementation is as much of a pain as always Even the smartest segments need embedding International Conference on Communication, Media, Technology and Design 24 26 April 2014, Istanbul – Turkey 148 Figure 2: role of segmentation S. Dibb (2012) Dilemmas with the Implementation of digital change arise for various reasons. Some academics believed that greater access to data would reduce the need for more traditional segmentation but research done on the field shows that traditional segmentation works equal to CRM ( W. Boulding et al 2005). Even thought the marketing literature offers insights for improving the effectiveness of digital changes in marketing filed there is limitation on how an organisation adapts its customer information processes once the technology is adjusted into the organisation.