Blog Posts By: Naras Eechambadi, PhD

Recently, there has been a flurry of articles in serious forums about the promise of BIG DATA. The Aspen Institute  authored a report on the Promise and Perils of Big Data and McKinsey Quarterly ran an article on the Challenge and Opportunity of Big Data.   There is even a conference for data scientists, a newly found species.  The most recent issue of Fortune calls data science the "hottest new gig in tech".    

The media world has been and continues to undergo dramatic shifts as content continues to be delivered and consumed in myriad ways.   A recent McKinsey Quarterly paper highlights the dramatic increase in the intensity with which people use digital devices and platforms. Approximately 50% of online consumers are now advanced users of smart phones, social networks and other tools such as tablets, up from 32% just two years ago. 

A few weeks ago, I wrote a blog suggesting that marketers and the DMA get ahead of net tracker legislation, after the FCC had invited some comments on proposed privacy legislation. Then came word that Senators John Kerry and John McCain, both senior and influential from opposite sides of the political and ideological spectrum, are co-sponsoring an "online privacy bill of rights". 

Earlier this month,  The Wall Street Journal featured an article on addressable TV advertising.   This development  has been eagerly awaited by advertisers for many years but it has been frustrated by the tremendous fragmentation in the infrastructure of TV delivery with its myriad varieties of delivery (satellite, broadcast, cable) and multiple generations of set top boxes with widely varying technologies that have to be reconciled.  

In an article in the Harvard Business Review a few years ago, Gail McGovern and John Quelch argued that outsourcing marketing can lead to better quality and lower costs.   They were arguing this primarily in the context of analytics and direct marketing, since most companies did not have in-depth expertise within their organizations to scale and manage these functions effectively and efficiently.

DM News reported recently that marketers opposed a Federal Trade Commission (FTC) proposal to implement an online "Do-Not-Track" option that would allow consumers to opt out of all third-party tracking and behaviorally-targeted advertising.  This would enable consumers to universally opt-out of being tracked online or through any digital channels (presumably).  

The marketers quoted in the article voiced opinions ranging from the thoughtful ("this will set back the online digital customer experience by five years") to the selfish ("..it would hurt our ability to get a complete picture").   THE FTC Chairman in proposing the move, predicted that it would be necessary if the industry did not do a better job of self-regulations.   The DMA, predictably, denied that self-regulation was not working without actually providing any proof that it was.   The DMA currently encourages its members to include opt out icons within their sites - much like unsubscribes on email, so that individual sites would stop tracking consumers.  

An excerpt from my guest post on the 1:1 Blog:

This summer, our family vacationed in Italy and Austria.  Travel, as am sure you will agree, is a very high involvement experience - exhilarating when things go well and pretty awful when things go wrong, particularly when you are traveling with family.  In preparing for the trip, we relied on traditional guidebooks as well as customer feedback from a variety of travel sites.  In doing so,it struck me that the guidebook companies have diversified and leveraged multiple media types to truly engage with their customers in order to inform and enhance their travel experience.

In an excellent recent blog entitled Don't fix your marketing processes, David Raab argues for more flexibility in marketing systems rather than improved processes, the staple recommendation of most consultants and experts.    I heartily endorse David's point of view and would like to extend it a bit further. 

According to David, the primary drivers of flexibility are small, simple, loosely connected processes, frequent measurements, technology that enables easy integration of new data sources and ease of use for marketers who want to change programs on the fly.  He also emphasizes the need for generalists who are comfortable with technology.   Good points, all of them. 

IBM purchased Unica Corporation late last week at a very significant premium - more than double Unica's closing price the previous day.  IBM has been a partner and client of Unica and this purchase has long been rumored, so it was not entirely a surprise.  The premium was eye catching in this market, particularly in light of Unica's financial performance this past year, but it was a small deal for IBM and, if they can leverage this asset through their bigger reach, it will have been well worth it.

When most people talk about innovation, they are often referring to the development of new or improved products, a la the iPad.   However, innovation with regard to processes and entirely new business  models are often much more impactful.  Famous examples of this are the lean manufacturing techniques pioneered by Japanese companies, the supply chain revolutions led by Dell and Wal-Mart, offshore support and development driven by Indian oursourcing companies such as Infosys and online retail shopping experiences from Amazon, e-Bay and myriad smaller online retailers.    Innovation in marketing can likewise help to transform businesses.  

I attended a webinar presented by Professor Paul Farris of The Darden School of Business at the University of Virginia.  He was promoting his updated version of his book on Marketing Metrics which was recently released.

He had done a survey of the folks that were registered for the webinar and the results were interesting.   

Recently I was on a keynote panel at the National Center for Database Marketing (NCDM).  In response to a question from the audience, one of my co-panelists pooh-poohed the value of web analytics.  He referred to it as just a fancy reporting mechanism for web activity with little relevance for marketing.  I was a little surprised by the comment and was itching to make a rebuttal, but the moderator chose to take the conversation in a different direction.  "Web analytics" is one of those terms that tends to be thrown around casually by folks seeking to impress others and can mean different things to different people (and mean nothing to most people).

Recently, we had interesting conversation with the senior executive in charge of customer service at a major client of ours.  This client uses our Precision email product to communicate with their customers on service issues, such as outages, delivery, scheduling of service calls, etc.

At a keynote panel at the National Center of Database Marketing (NCDM), I made a comment that customer marketing was eclipsing brand marketing as the core of marketing's mission in many companies.  That sparked a lively discussion among the panelists.  As is to be expected among panelists at a database marketing conference, there was general agreement that this was the case.  But is it, really?  Does brand marketing still matter?  Of course, it does!

The great health care debate this past summer could be a preview of what the future of marketing looks like.  How, you ask?  For some years now, the "mainstream" journalists who have been trained to fact check and present both sides of a story have been losing their voice to an ever growing multitude of  bloggers with extreme views , strong opinions and, in some cases, a disdain for facts and sober analysis.  This blogosphere, magnified by the echo chamber of 24/7 cable news channels, hungry for controversy and content, set the tone and the agenda for the shouting match that stood in for reasoned debate on the topic of healthcare, a subject of great concern for most Americans.  Professional journalists were caught by surprise and spent most of their time reacting to these controversies rather than reporting on the substance of health care reform.  Marketers have similarly embraced social networks as a way to generate word of mouth advertising, cross over tipping points, build fan bases and encourage consumers to generate their own content.   

Last month, I was on a keynote panel at the National Center for Database Marketing (NCDM).  The topic of the panel was "Evolving from Database Marketing to Customer Intelligence" and the discussion largely centered around the evolution of marketing into a bi-directional communication mechanism with customers across multiple channels and the challenges that brings.  An audience member asked the question, "Is technology the gating factor that prevents or slows marketers from embracing these changes?"   The panel differed on their responses.   Some felt, yes, technology was indeed an impediment to doing this well.     I and at least one other panelist disagreed.   

One of the most annoying aspects of the customer experience does not have to do with the shopping experience but with the communication experience.    A constant refrain we hear from customers across the board (whether in B2B or B2C situations) is that they get too many calls or emails but often do not hear when there is relevant news that they are truly interested in.  On the other hand, a surprising (and dismaying) number of marketers still measure their productivity by the sheer volume of outbound communications (email, direct mail, calls, touches, etc.) rather than by the quality or even the relevance. 

I attended the recent NDCM (National Center for Database Marketing conference) in Las Vegas last week, after a gap of many years, the triggering event being the fact that I was on a keynote panel being moderated by David Frankland of Forrester Research.  Attending the event after this multi-year hiatus and, particularly,  on the tenth year anniversary of a keynote address I had given there after I had started Quaero in 1999, I was struck by the changes in the conference over the years.    It is, to state the obvious for those who have been attending for many years, much smaller than it used to be.   I would guess a fourth or even a fifth of the size that it was ten years ago.  When you consider the fact that there used to be two NCDMs a year at that time versus just one this year, that is quite a precipitous fall.  Given the revolutionary changes in marketing over the past ten years, one would have expected quite the opposite.    The NCDM has always been focused on the technology aspects of direct marketing and technology has been the driver behind many of the changes in marketing in recent years.   

Based on what I observe with many of our clients these days, particularly the ones that are hurting the most, I wonder if "hard times bring forth innovation".   Clients in multiple industries seem more open to considering new ways of doing things, perhaps because the same old same old is simply not working anymore  Or is it perhaps because they are so desperate, they will try anything?   Actually, having spent some time with senior marketing executives as well as general managers, I think the smart ones see an opportunity to actually use these hard times to execute on ideas they have had for some time - so it may be a case of not letting a crisis go to waste.  

I was talking to a senior client last week who heads up Global Customer Intelligence for  Fortune 50 company whose sales come mostly from other businesses, although they do have a substantial consumer business as well.    We were discussing the challenge of proving the Return on Marketing Investment (ROMI), particularly in this challenging environment.     He said he had gone to his CEO with a well planned business case for a revamp of their website, which does a fair amount of ecommerce but is also a showcase for their capabilities.  The CEO listened patiently to the pitch, bought into the ROI estimate but then said "Just one of our sales people can get me more revenues than this by working a little harder at one or two of our major accounts.  Why should I bother investing money in the web site when I can get a lot more bang for my buck elsewhere?" 

Marketers at most companies choose their campaign management tool in one of two ways.    The first approach is to feel a pain around their ability to execute multiple, increasingly complex campaigns. They then figure that the right software can help ease this pain and go pick a software tool, have it implemented train their people and hope for the best.   Not the best approach but one it is a road taken by many.   This approach usually leads to regrets and recriminations, but that is to be expected.   The second way is a little more thoughtful and deliberate.    This approach takes the time to identify business requirements, develop a business case not only for the purchase and installation of the software but also for any other related changes in process, organization and skill upgrades that may be involved in this transformation.    See my colleague Joe Kelly's blog on selecting a marketing automation tool for more on this.  

I recently attended the Forrester Marketing Forum held at the Walt Disney Yacht and Beach Club Resort in Orlando, Florida. Click here to read the official Forrester blog post.  I'd like to provide some highlights from a few of the more interesting speakers, with a focus on observations that were not obvious:

It is axiomatic in marketing and customer management circles that it is much more difficult and expensive to acquire a new customer than it is to retain an existing customer.   Estimates range from five to fifteen times as expensive, depending on the industry and situation.   This is a reason why companies ought to pay more attention to nurturing current relationships and ensuring that customers feel valued, whether by providing a great experience or by other means.    Incidentally, happy customers can also be a great source of referrals and can help reduce the above mentioned high acquisition cost.

The Winterberry Group recently published a research study on trends in direct mail.  http://www.winterberrygroup.com/research/wp/   The study found that direct mail spending in the U.S. declined by 3% in 2008 and volumes declined dramatically by about 4.5 overall, 12% in some verticals.  This is unprecedented, after more than 30 years of steadily increasing streams of direct mail.   What is more, the study projects that volume will decrease a further 10 - 15% this year.    So is this the death knell for direct mail or will growth rates resume once the economy bounces back?  The study actually predicts that direct mail will not resume its high growth rates, because the current tough economic conditions have forced direct marketers to innovate by focusing on more targeted approaches, less expensive online channels, etc.  

I got this email from US Airways today:

"On March 1, we're bringing back free drinks in our Coach cabin. This includes sodas, juices, tea, coffee and water on all US Airways and US Airways Express flights.   We believe in our pay-for-what-you-choose-to-use - or "a la carte" - business model, but it's a work-in-progress. We are committed to remaining competitive and that's the main reason we have decided to bring back free drinks.  You still have the choice to only pay for the things you want - like checked bags, Choice Seats or First Class upgrades. And, those services will continue to be free for our Preferred members" .