“Big data” enables brands to quickly and precisely measure an audience’s short-term response to marketing activity. However, the danger with basing marketing decisions on this information is that detrimental behavior to long-term brand equity such as price promotions tends to spike such measures. The result can be gravitation toward programs that ultimately degrade the brand.
This happened when scanner data emerged in the 1980’s and it is happening again today. An article in the November issue of HBR, “Don’t Let Big Data Bury Your Brand,” by Peter Horst and Robert Duboff chronicles the dangers of relying to heavily on big data and what can be done to reduce those risks.
The article notes that major companies such as Time, Michelob, and Capital One succumbed to the trap of measuring the ROI of marketing programs using short-term markers, and their brands were significantly damaged as a result. They suggest three ways to protect your brand from the pitfalls of big data:
- Develop and use long-term measures of brand equity instead of, or in addition to, short-term indicators. Factors such as perceptions and attitudes toward a brand, and loyalty for a brand are important indicators of brand equity. Also, use the common sense test. Is this program consistent with what we want the brand to stand for? (Of course, this assessment requires that the brand first have a vision that is clear, known, and accepted.)
- Find programs that both incorporate brand building and stimulate an immediate response. For example, General Mills adds a promotion at the end of its branding ads. Fidelity has a green navigation line that symbolizes Fidelity’s ability to put people on the right track, which bridges the gap between brand building and inspiring action.
- Compel the mar-tech and brand teams, which are usually staffed by very different types of people, to work together to create win-win programs. For marketing programs to be impactful in the near term yet still build equity over time, the perspectives and talents of each group are needed.
The challenge is to create an organizational structure that allows them to collaborate successfully. Of course, there are many ways big data can enhance a brand’s marketing efforts that carry little risk. For example, big data can be used to create strategic insights about the brand’s customer segments and behaviors. General Mills uses data to understand the sentiments of consumers who are buying for young children or those responding to cholesterol guidance from a physician.
Big data can even be used to change the consumer experience like L’Oréal did with their Make Up Genius app. Big data is a big idea, but it should not be used to focus solely on near-term results at the expense of building and protecting the brand.