Is data the new black?
21st June 2012
If you commissioned a professional to do some work for you and he or she told you that the work would lead to a 99.5% or a 99.8% or a 75% failure rate you’d be pretty crazy not to cancel the work right there and then. But that level of failure is what most digital marketing campaigns attain these days. Flip those numbers around and what you get is the average Facebook engagement rate of 0.5%, the average banner click through of 0.2% and the average email open rate of 25%.
A 1 or 2% engagement rate on Facebook is seen as a great result – that means only 98% of your audience is unengaged with the content you carefully prepare and publish. A 30% email open rate is likely to elicit hi-fives around the office and beers for all but 70% of your target audience, an audience which has given you permission to speak to it, has said ‘thanks, but no thanks’ – they haven’t even bothered to open the email!
Now of course if you’re Coca Cola and you have a Facebook page with 42 million followers a 0.5% engagement rate means that 2,100,000 people interacted with your content. That’s pretty impressive as an absolute number of eyeballs. But most brands will never achieve anywhere near this reach so most of the time they are speaking to no one but a hardcore follower – the 0.5%
The reason for this stunning lack of engagement (even though we like to think of 1% as a ‘success’) is the lack of relevance to the end user. Brands such as Amazon are able to achieve significantly higher response rates to its marketing initiatives because it has the most valuable thing a brand can have about its customers: data – and shedloads of it.
Data is the new black. Data is what will make a digital marketing campaign a real success rather than an imagined success. It’s the difference between a 50% email open rate and a 25% one, a Facebook community with a real level of engagement rather than a passive audience and a display campaign which is not ignored by 99.8% of the people who see it.
The smart use of data by marketers and product & service managers will transform not only the digital marketing landscape but also the services that companies will offer their customers. Using data to tailor communications and services to customers will lead to greater levels of engagement and conversion and most importantly of all, loyalty.
There will always be a place for mass-market campaigns designed to raise awareness of a product, service or brand – the latest Commbank Can’t campaign being a good example of this. But to achieve conversion and loyalty means targeting people in a relevant way that speaks to their lives, their lifestyles and their needs. Collecting data on your audience is the smartest way to get this insight. Target in the US is a great example of how data is used to create conversations and engagement with the consumer that is likely to lead to a purchase.
Most brands and organisations collect gigabytes of data but more often than just leave it untouched in the very expensive CRM system they bought– after all why bother using this when you can achieve a success of 0.5% with a traditional digital marketing campaign? Data needs to be used and used smartly if its true potential is to be achieved. That’s the major challenge on the road ahead for any organisation or brand wishing to truly engage with their audience online.