Why you need a chief data officer
In a data-driven world it is becoming increasingly essential that CMOs and CDOs are collaborating to optimise ROI strategies, writes Oath’s Alex Timbs
Data is everywhere. Research firm Gartner believes 2017 is the year data and analytics will go mainstream and it’s hard to argue with that assertion.
In this hyper-connected, multi-device age, people are ‘always on’. Moreover, they now demand personalised experiences on every screen. To be successful in this data driven digital era, businesses and marketers need to identify and reach consumers based not only on macro trends but individual behaviours and personalities.
Brands must unlock the value of their data to drive more effective and consumer centric marketing strategies. The role of a chief data officer (CDO) is key to this, as well as producing value for the CMO, CFO, and ultimately the CEO.
Though the role itself is not necessarily ‘new’, what is emerging as a new force within brands is the alignment of the CMO’s and CDO’s strategies – merging the huge amounts of data that the company amasses throughout its customer touchpoints with marketing software algorithms that can analyse the data and provide insights that help define not only marketing strategies, but ultimately data, financial and product strategies as well.
As part of this strategy, together with customer relationship management (CRM) systems and data management platforms (DMPs), brands are also now employing attribution software platforms to accurately analyse ROI across both online and offline channels and revenue streams, something that has until recently not been possible.
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The issue marketers especially have had to deal with is the fragmented nature of the data they collect and the models they have to analyse it. CMOs have used marketing mix modelling since the eighties to determine expected returns based on how they spend their money. It helped enormously with the top down, big picture stuff, like annual budgeting and the optimisation of media channels. It not only factored in sales and promotions, but also the non-marketing influences, such as socio-economic and environmental factors.
Multi-Touch Attribution (MTA) on the other hand has provided the bottom up, sub-channel, tactical-level insights that just weren’t achievable with older-style media. It helps track the customer journey across multiple devices, navigating often-unpredictable consumer behaviour.
Ultimately, both these models are trying to do the same thing – determine how marketing impacts revenue and ROI. But they both have their shortcomings and, due to such different methodologies, they don’t work together to help marketers arrive at the source of the truth.
Marketers need a cohesive, comprehensive, continuous analytic solution that provides both high-level strategic planning, as well as prescriptive, actionable recommendations at a timely, tactical execution level – a bridge between the tried and true (albeit broad) measurement through marketing mix modelling, and the data-driven, highly accurate (but in the weeds) measurement through multi-touch attribution.
Finding software platforms to do this has never been more important. The current industry catchphrase is consumer first or people first marketing. But to really be people-first, you need a 360 view of each person. Unfortunately, the consumer journey has become much more complex, and brands have increasingly more ways to reach consumers. From TV to Out-of-Home, mobile to social, email to gaming, IoT to events. The path to purchase is never linear and usually includes more than one device. More often than not this leaves marketers with a fragmented view of their consumer, therefore preventing them from being truly people first.
But by using a continuous analytic solution, marketers are able to utilise its algorithm to understand which marketing touchpoints impacted or did not impact the final purchase or conversion. Only then can a marketer understand the entire customer path and in turn develop a deeper understanding of their consumer. By turning this data and insight into actions, marketers can improve performance automatically. Hence why brands are investing more in data collection and analytics.
Moreover, simultaneously the CDO will have insight into all data collection and sources from across the business – not just through the marketing channels. In turn, they can help the CMO to understand the broader context of the data into wider business problems and ultimately, solutions.
Similarly, the CMO’s attribution modelling provides the CDO with powerful insights and data to make their role even more critical to the C-suite.
Looking to the wider industry, over the coming months the role of the CDO will become even more important. As of the 25th of May 2018, businesses and retailers based in the EU, have customers that reside in the EU, and handle the personal data of EU citizens, will have to comply with new data protection regulations: the GDPR (General Data Protection Regulation). It has been designed to tighten the collection, use and retention of consumer data across the EU. Incorrect or misuse of data will be costly, with a maximum potential fine of 20 million Euros or 4% of global turnover for breaching consent.
Each opt-in to marketing communication must be verified, unambiguous and recorded for reference as long as the data is kept. For marketers however, there is an opportunity to build trust. Once you’ve got consumer consent, you can show how much you understand your customers by serving them more relevant information at the right time and through the right channel. By building their trust, marketers can achieve greater retention rates, improved analytics and increased ROI.
So essentially, brands don’t necessarily need more data, what they should be looking for is trusted data. Trusted data transforms content and advertising into experiences that are more personal, engaging, and relevant. Trusted data powers better results, smarter investments and greater consumer value. And with the continued proliferation of data and devices, trusted and differentiated data with a strong mobile foundation will matter most in content and advertising.
In conclusion, in today’s busy marketing and data ecosystems, it is becoming increasingly essential that CMOs and CDOs are collaborating to optimise ROI strategies. Ultimately, through this collaboration lies the key to unlocking insights through the vast amounts of data available, that will in turn aid the CFO and CEO to solve wider business problems.
Alex Timbs is head of data & attribution, Oath