Data is the New Oil

By Michael Palmer

"Data is the new oil!" Clive Humby, ANA Senior marketer’s summit, Kellogg School.
Data is just like crude. It’s valuable, but if unrefined it cannot really be used. It has to be changed into gas, plastic, chemicals, etc to create a valuable entity that drives profitable activity; so must data be broken down, analyzed for it to have value.

The issue is how do we marketers deal with the massive amounts of data that are available to us? How can we change this crude into a valuable commodity – the insight we need to make actionable decisions?

First we must understand that data is not insight. It is easy to grab a single fact and extrapolate that one fact into an actionable direction. But without context a fact is just that a fact, it is not an insight. For instance, if you discover that in one area your brand awareness level is significantly below your brand awareness level of other regions, should you panic? One brand analysts did. He sent up a red flag throughout his company telling the world that the sky was falling. However, when the CMO checked other facts (share levels, profit margins, target segment awareness) he uncovered that the once thought issue area was in fact a not a problem at all but a very profitable area.

Second we must understand that for data to mean something must be placed in context to the marketplace. An insight is usually a simple fact, one that allows all corporate functions to work together. Howard Schultz says in his book that his key insight for Starbucks was "we serve people coffee, we don’t serve coffee to people". That one concept changed everything Starbucks did. It helped Starbucks understand they were not about the coffee, but the experience they offered people. More importantly it has help drive everything the company did - it helped provide everybody with a screen to throw ideas against and weed out the bad ideas. It helped people make of the more right decisions which has keep the company growing: like not chasing people out of the store, even if they linger and buy no more than one cup of coffee. Starbucks is the place to meet, the place they are happy to see you. No one is a number or a profit target. They are people, enjoying the experience of buying coffee at $4.50 even though they could buy their coffee for only $.95 two doors down the street.

Data then is the commodity. An insight is the currency that gives you the wherewithal to drive organic growth. Therefore while it is critically important to continue to drill down for data, one must remember not to accept data as fact and not to accept a fact as insight. By looking a facts in context to your situation you are providing everyone on your cross-functional team with a usable insight – a simple principle by which decisions can be screened, a way to help determine if the actions you are about to take are on or off target. But as Wendy’s founder Dave Thomas said "Simple is hard". Finding a simple yet cultural changing insight will be hard, but its concept will be so simple, powerful and galvanizing, that it will drive real change within an organization. So become a marketing insight roustabout and start drilling for your crude.

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Comments

[Cheap Jordans]

He is unfortunate who cannot bear misfortune

[Nina B]

Information overload is the much over used term of modern times - but it is also misleading. Data overload is the issue, in fact. I almost never have trouble getting too much data, i.e. Google something and see the millions of responses, but getting information (which sites are most valuable, current, truly relevant, reliable, etc.) is a problem. Consuming data in a useful format so it has meaning and is trusted, is the next big challenge for I.T. and the end user.