Use External Data Layers to Predict the Future, Discover Opportunity
When I think about how most digital marketers and executives allocate budgets and develop media strategy, I’m reminded of a boat trip I took down to the Bahamas. My friends and I found ourselves in constant peril of running aground, due to the sharp assent of the sea floor and the numerous reefs.
It got me thinking about how we were assessing our situation – our radar was positioned underneath the back of the boat to measure the distance to the sea floor. In my native Louisiana this was fine as the land came up gradually, providing plenty of time to stop. Not so in the Bahamas.
So we set up a system whereby a lookout was stationed at the front of the boat to detect the subtle darkening of the water color. This would indicate that land was getting closer to the surface and we needed to slow down. That, coupled with the radar, gave us peace of mind that our boat was safe: predicting what was coming, verified by data from the rear.
The problem is that most businesses use only rear-facing data (like past sales data) to make decisions about their business. Clayton Christensen, Harvard professor and renowned expert on disruptive innovation, discussed this very issue when he addressed the Senate last year. He said, “God threw us a curveball when he made data only about the past.” As a result, “most board meeting are convened at the back deck of the boat looking out over the wake.”
And I’ve found that digital marketers are some of the biggest culprits of this behavior.
In a recent McKinsey Quarterly article, David Court says that marketing decisions have always been based on facts and judgment. When marketing was only about traditional media this was fine, as marketers had years of data and familiarity with TV and print. But digital is different; it’s still new and we don’t have decades to draw from. Marketers, therefore, rely more heavily on their rear-facing data, and this is often at the expense of common sense.
But it doesn’t need to be this way. We can use external data to predict what’s coming or, more accurately, to understand where our opportunities lie. Because, in fact, data layers are everywhere— data about your potential customers, where they live and what they do; data about a given market, or economic conditions that might affect product sales. Use these layers to create prediction about future profitability. That way, you are allocating media and budget according to opportunity, not past purchasers or current intenders.
Because the first step towards reaching your destination is pointing it out. So, let’s head to the front of the ship.
Christopher Skinner is a frequent speaker at Google conferences and other digital industry events. He founded MakeBuzz in 2001 and has worked with over 250 leading companies, including Vodafone, Target, United Airlines and Oreck. Look for Christopher’s column on The Makegood every month.