7 Limitations of Big Data in Marketing Analytics

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7 Limitations Of Big Data In

Marketing Analytics
Big data -- the cutting edge of modern marketing or an overhyped

buzzword? Columnist Kohki Yamaguchi dives in to some of the
limitations of user-centered data.
Kohki Yamaguchi on February 12, 2015 at 10:25 am
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As everyone knows, big data is all the rage in digital marketing nowadays.
Marketing organizations across the globe are trying to find ways to collect and
analyze user-level or touchpoint-level data in order to uncover insights about how
marketing activity affects consumer purchase decisions and drives loyalty.
In fact, the buzz around big data in marketing has risen to the point where one could
easily get the illusion that utilizing user-level data is synonymous with modern
marketing.
This is far from the truth. Case in point, Gartners hype cycle as of last August placed
big data for digital marketing near the apex of inflated expectations, about to
descend into the trough of disillusionment.
It is important for marketers and marketing analysts to understand that user-level data
is not the end-all be-all of marketing: as with any type of data, it is suitable for some
applications and analyses but unsuitable for others.
Following is a list describing some of the limitations of user-level data and the
implications for marketing analytics.
1. User Data Is Fundamentally Biased

The user-level data that marketers have access to is only of individuals who have
visited your owned digital properties or viewed your online ads, which is typically not
representative of the total target consumer base.
Even within the pool of trackable cookies, the accuracy of the customer journey is
dubious: many consumers now operate across devices, and it is impossible to tell for
any given touchpoint sequence how fragmented the path actually is. Furthermore,
those that operate across multiple devices is likely to be from a different demographic
compared to those who only use a single device, and so on.
User-level data is far from being accurate or complete, which means that there is
inherent danger in assuming that insights from user-level data applies to your
consumer base at large.
2. User-Level Execution Only Exists In Select Channels

Certain marketing channels are well suited for applying user-level data: website
personalization, email automation, dynamic creatives, and RTB spring to mind.
In many channels however, it is difficult or impossible to apply user data directly to
execution except via segment-level aggregation and whatever other targeting
information is provided by the platform or publisher. Social channels, paid search, and
even most programmatic display is based on segment-level or attribute-level targeting
at best. For offline channels and premium display, user-level data cannot be applied
to execution at all.
3. User-Level Results Cannot Be Presented Directly

More accurately, it can be presented via a few visualizations such as a flow diagram,
but these tend to be incomprehensible to all but domain experts. This means that
user-level data needs to be aggregated up to a daily segment-level or property-level
at the very least in order for the results to be consumable at large.
4. User-Level Algorithms Have Difficulty Answering Why

Largely speaking, there are only two ways to analyze user-level data: one is to
aggregate it into a smaller data set in some way and then apply statistical or
heuristic analysis; the other is to analyze the data set directly using algorithmic
methods.
Both can result in predictions and recommendations (e.g. move spend from campaign
A to B), but algorithmic analyses tend to have difficulty answering why questions
(e.g. why should we move spend) in a manner comprehensible to the average
marketer. Certain types of algorithms such as neural networks are black boxes even
to the data scientists who designed it. Which leads to the next limitation:
5. User Data Is Not Suited For Producing Learnings

This will probably strike you as counter-intuitive. Big data = big insights = big
learnings, right?
Wrong! For example, lets say you apply big data to personalize your website,
increasing overall conversion rates by 20%. While certainly a fantastic result, the only
learning you get from the exercise is that you should indeed personalize your
website. While this result certainly raises the bar on marketing, but it does nothing to
raise the bar for marketers.
Actionable learnings that require user-level data for instance, applying a look-alike
model to discover previously untapped customer segments are relatively few and
far in between, and require tons of effort to uncover. Boring, ol small data remains far
more efficient at producing practical real-world learnings that you can apply to
execution today.
6. User-Level Data Is Subject To More Noise

If you have analyzed regular daily time series data, you know that a single outlier can
completely throw off analysis results. The situation is similar with user-level data, but
worse.
In analyzing touchpoint data, you will run into situations where, for example, a
particular cookie received for whatever reason a hundred display impressions in a
row from the same website within an hour (happens much more often than you might
think). Should this be treated as a hundred impressions or just one, and how will it
affect your analysis results?
Even more so than smaller data, user-level data tends to be filled with so much
noise and potentially misleading artifacts, that it can take forever just to clean up the
data set in order to get reasonably accurate results.
7. User Data Is Not Easily Accessible Or Transferable

Because of security concerns, user data cannot be made accessible to just anyone,
and requires care in transferring from machine to machine, server to server.
Because of scale concerns, not everyone has the technical know-how to query big
data in an efficient manner, which causes database admins to limit the number of
people who has access in the first place.
Because of the high amount of effort required, whatever insights that are mined from
big data tend to remain a one-off exercise, making it difficult for team members to
conduct follow-up analyses and validation.
All of these factors limit agility of analysis and ability to collaborate.
So What Role Does Big Data Play?

So, given all of these limitations, is user-level data worth spending time on?
Absolutely its potential to transform marketing is nothing short of incredible, both
for insight generation as well as execution.

But when it comes to marketing analytics, I am a big proponent of picking the lowesthanging fruit first: prioritizing analyses with the fastest time to insight and largest
potential value. Analyses of user-level data falls squarely in the high-effort and slowdelivery camp, with variable and difficult-to-predict value.
Big data may have the potential to yield more insights than smaller data, but it will
take much more time, consideration, and technical ability in order to extract them.
Meanwhile, there should be plenty of room to gain learnings and improve campaign
results using less granular data. I have yet to see such a thing as a perfectly
managed account, or a perfectly executed campaign.
So yes, definitely start investing in big data capabilities. Meanwhile, lets focus as
much if not more in maximizing value from smaller data.
Note: In this article I treated big data and user-level data synonymously for
simplicitys sake, but the definition of big data can extend to less granular but more
complex and varied data sets.
Some opinions expressed in this article may be those of a guest author and not
necessarily Marketing Land. Staff authors are listed here.
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ABOUT THE AUTHOR
Kohki Yamaguchi
Follow @kohkiyamaguchi
Kohki Yamaguchi leads product marketing at Origami Logic, a cross-channel marketing intelligence
solution for modern marketers. With a career of 8 years in marketing and analytics spanning various
functions, Kohki's focus has always been on translating data into strategy, simplifying the complex, and
bridging the gap between data and organizational silos.
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CMO

Analytics & Conversion

7 Limitations Of Big Data In

Big data -- the cutting edge of modern marketing or an overhyped

1. User Data Is Fundamentally Biased

2. User-Level Execution Only Exists In Select Channels

3. User-Level Results Cannot Be Presented Directly

4. User-Level Algorithms Have Difficulty Answering Why

5. User Data Is Not Suited For Producing Learnings

6. User-Level Data Is Subject To More Noise

7. User Data Is Not Easily Accessible Or Transferable

So What Role Does Big Data Play?

for insight generation as well as execution.

ABOUT THE AUTHOR

The Truth About Big Data

My Date With Big Data

ANALYTICS & MARKETING COLUMN

CHANNEL: ANALYTICS & CONVERSION

(Some images used under license from Shutterstock.com.)

Analytics news and expert advice every Thursday.

ATTEND OUR CONFERENCES

LEARN MORE ABOUT OUR SMX EVENTS

LEARN MORE ABOUT OUR MARTECH EVENTS

IBM DIGITAL MARKETING OPTIMIZATION

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