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Digital MarketingMarketing Strategy

How Customer Data Collection Trends Are Transforming Marketing

As the number of smart devices in use grows, the amount of data collected online is multiplying exponentially. The size of the digital data universe will increase 40 percent each year into the next decade, predicts IDC. In 2013, the total amount of digital data stored globally had reached 4.4 zettabytes, equivalent to about 4.4 trillion gigabytes.

By 2020, when 5.5 billion people will own mobile phones, that number will explode to 44 zettabytes, or about 44 trillion gigabytes. Corresponding to this proliferation of data is a diversification of data sources, along with the emergence of increasingly sophisticated data collection methods and analytic technology. Here’s an overview of some of the trends driving today’s digital data revolution and how they’re transforming the nature of business and marketing.

Data Sources

During the early stages of the digital revolution, consumer data collection focused on information acquired from website visitors, particularly on cookie-enabled browsers and through email. With the rise of smartphones, data collection from mobile devices has moved to the forefront. Today, as the variety of smart devices continues to diversify, the paradigm for data collection is shifting from the devices themselves to individual consumers moving between devices within an all-encompassing Internet of Things.

Within an IoT context, data about individual consumers can include information obtained from their TV, phone, PC, tablet, watch and car. Market research that combines information from each of these data sources about individual consumers enables a form of marketing called personalization, where advertising offers are customized to appeal to individual behavior patterns and preferences. By 2018, companies that have fully invested in such personalization will outsell their competitors by 20 percent, according to Gartner. To illustrate the power of personalization, luxury travel company Secret Escapes generated a 32 percent increase in sign-ups and a 210 percent increase in purchases by applying personalized data to its website design.

Data Collection Methods

As MIT’s website explains, data collection traditionally divides into active and passive methods. Passive methods involve data collected by machines monitoring consumer behavior, using techniques such as http logging of interactions between web clients and servers, as well as using cookies to gather information from computers. Active methods, meanwhile, involve consumers deliberately providing information, using techniques such as opt-in forms, review buttons, surveys and clicks on call-to-action links.

In an IoT context, passive data collected from ambient smart devices will become increasingly popular and relevant, Arpan Ganguli of the London School of Economics and Political Science explains. For instance, an organization’s passive data might indicate a large percentage of its website visitors use devices compatible with Samsung Pay, such as the Galaxy Note5. In this case, the company may wish to consider deploying geo-targeted ads geared toward these users and investing in a point of sale system that accepts mobile payments from their devices.

Data Analytics

As the amount of data gathered by the IoT increases, the role of big data analytics will grow with it. Once the province of the IT department, analytics is rapidly becoming enterprise-wide, Deloitte reports. Information gathered from across the enterprise is being pooled and analyzed to drive company decisions, giving rise to what is being called the insight-driven organization. As Deloitte advisor Tom Davenport explains, IDOs base their business decisions on insights gleaned from analyzing hard market data, rather than relying on intuitive guesses about market trends. Pittsburgh-based health plan UPMC, for instance, has used analytics of enterprise-wide data to identify which customers are most likely to respond to disease management offers. This type of highly-targeted information enables companies to better tailor their marketing efforts toward consumers for higher ROI.

Patrick King

Patrick is the Founder of Imagine and advisor to places on brand strategy and creative. His insights have been published in Inc. Magazine, SmartCEO, Washington Business Journal, The Washington Post, and Chief Marketer, among other publications, and shared at conferences throughout the US. He also has an amazing sock collection.

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