Marketers are spending more and more money to collect more and more data without having a clear idea of what they’re going to do with it.
That’s the conclusion of a new report, “Data-Rich and Insight-Poor,” from Infogroup Targeting Solutions and Yesmail Interactive. The report found that almost 70 percent of companies surveyed plan to spend more on data-related marketing initiatives in 2013. But while companies are getting better at collecting data, they’re not spending as much thought on what to do with it afterwards.
Responses were drawn from more than 700 marketers who attended the DMA2012 Annual conference and Forrester Research’s eBusiness Forum.
Many of the respondents claimed that this is going to be the year when they actually analyze all the data they’ve collected. Almost half of the respondents said analyzing or applying data will be their biggest data-related challenge in 2013. And in many cases, that’s where the expense is going to come from -– hiring data analysts and executives to be responsible for analyzing all that data and deriving some meaning from it. 68 percent of marketers said they expect their data-related expenditures to increase in 2013, while 56 percent plan on hiring new employees to handle data collection or analysis, with the most common position being a data analyst/strategist.
But a bigger challenge may be taking care of the data they already have. More than a quarter of marketers can’t remember the last time they performed quality control on their customer data. Almost half the respondents said they perform regular quality control, but more than a quarter of those respondents said they cleaned their data either quarterly or annually, which is still rather infrequent, the report said. As a result, any conclusions they might be able to draw from the data could be of dubious quality. “Proper maintenance requires weekly or at least monthly updates,” the companies said. “However, it is a pervasive problem in the industry to see large companies sitting on years of inactive files.”
The report also quoted from a recent Forrester paper entitled “How Dirty is Your Data.” “Competitive intelligence professionals admit they’re storing 10-plus years of transaction detail about their customers or several months’ worth of cookie data,” analysts said. “Our findings indicate that a large segment of marketers are making decisions based on outdated, duplicate and junk data that could be in low-performing campaigns that cost them customers and revenue.”
Many marketers said their new focus will be collecting even more data in real time, but they may not be questioning whether the added expense and complexity is worth the effort.
Part of the blame is put on the notion of “Big Data,” the popularity of which has led some companies to conclude that more data is always better and that simply putting all the data in a computer system together will somehow magically transform it into useful information. Just because the technology exists to allow us to collect terabytes of data -– now in real time –- does that mean we should?
“Instead of spending money to target prospects with a 1 or 2 percent response rate, many companies would be better off cleaning their existing databases first to mine high-value customer segments,” advised the report.