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(Ebook PDF) (Ebook PDF) Creating Value With Big Data Analytics: Making Smarter Marketing Decisions All Chapter
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Contents
List of figures xi
List of tables xvi
Foreword xvii
Preface xix
Acknowledgements xx
List of abbreviations xxi
Index 309
Figures
Companies around the world are struggling with a vast amount of data, and
can’t make sense of it all. “Big data” has the promise of providing firms with
significant new information about their markets, their products, their brands,
and their customers—but currently, there’s often a great divide between big
data and truly usable insights that create value for the firm and the customer.
This book addresses this huge need. When I had the opportunity to read
Creating Value with Big Data Analytics: Making smart marketing decisions, my first
reaction was: Thank goodness! Where has this book been all my life? Finally,
here’s a book that provides a clear, detailed, and usable roadmap for big data
analytics. I know that’s hard to believe, but read on.
As I write this, Facebook has reached a new milestone of 1 billion users in a
single day. Just think of the big data analytics opportunities from just that one
day. Verhoef, Kooge and Walk have developed a theoretically sound and highly
practical framework. Their value creation model just makes sense; it makes the
complex simple. First, they clearly identify the goal of any analytic “job to be
done”, focusing on either (a) creating and measuring value to the customer, or
(b) creating and measuring value to the firm. They further break these two goals
down into three levels: market level, brand level and customer level.This clear delin-
eation of six key analytic areas of focus, followed by practical, “how-to” guides
for using and analyzing big data to answer questions in each of these key areas, is
a highly executable approach, well grounded in rigorous scientific research.
They do a great job of achieving three key objectives:
1 Teaching us all how “big data” provide new opportunities to create value
for the customer (so customers like our products and services better), and
for the firm (so we make more profit), while also helping us to be mindful
of key security and privacy issues. This framework makes the book work.
2 Teaching us specific analytic approaches that truly fit identifiable market-
ing questions and situations, and, most importantly, how to gain insights
that lead to value creation opportunities—new growth opportunities, new
customers, or growth from existing customers. This is the missing piece
that this book does so well. One key advantage of this book is that it offers
in-depth key analytic approaches for all areas of marketing, including ana-
lytic classics, new big data techniques, story-telling and visualization.
xviii Foreword
3 Teaching us how to develop a big data analytics capability focused on value
creation—that delivers growth and positive ROI. By taking us through the
entire process from getting the data, to integrating the data, to analysis, to
insight, to value, to the role of the organization—the roadmap is complete,
and ready for anyone to begin.
Who should read this book? Anyone who needs to understand customers, prod-
ucts, brands, markets or firms. CMOs and marketing executives should read this
book—it provides great insights into how you can develop a successful big data
analytics capability, and how to interpret insights from big data to fuel growth.
Those individuals charged with insights within the organization should read
this book: one of the key learnings from Verhoef, Kooge and Walk’s approach is
that you’ll know what analysis to do, when, for what purpose, and with what
data. That’s huge! Data scientists should read this book—not because you need
to learn the analysis techniques described here (you may be aware of many of
them), but because it will strengthen your ability to gain insights on market-
ing problems and help you to communicate your ideas and insights to the rest
of the organization. Even professors and students of analytics should read this
book. It provides a rigorous approach to frame your thinking and build your
analytic skills. And finally, if your head is swimming and you’re overwhelmed
with the opportunities and complexities of the “firehose” of big data, this book
is for you.
I believe it’s the Rosetta Stone we’ve all been looking for, finally answering
critical questions: How do we create insights from big data for marketing? How
do we create value from big data? How do we solve problems with big data?
And how do we get a positive ROI on our investment in big data analytics?
Whether you are just starting on your journey in big data analytics, or well on
your way, you will learn a ton from this book.
The authors don’t shy away from all the complexities and the messiness of big
data and analytics. Rather, they make the complex manageable and understand-
able. They explain difficult analytic approaches clearly and show you when—
and why—to use what technique. They provide a rare combination of science
and practicality. Examples, cases and practical guidelines are clear, detailed and
readable, taking you to that next step of getting to the business of analyzing
your own big data to create value for your customers and your firm.
What more can I say? Creating Value from Big Data Analytics: Making smart
marketing decisions offers in-depth, rigorous and practical knowledge on how to
execute a successful big data analytics strategy that actually creates value. This
is the first book that puts it all together. Thanks so much to Peter, Edwin and
Natasha for writing the book that we all really needed.
Writing this book would not have been possible without the support of many
people. Foremost we want to thank Kim Lijding who gave us considerable
help in the final stages of the book, especially in getting the chapters organized.
We also thank Hans Risselada PhD for some collegial feedback and the many
marketing managers and marketing intelligence managers who provided valu-
able input for our book in the development process. We also acknowledge the
support from Nicola Cupit from Routledge during the writing process. Finally,
we want to emphasize that writing this book was a great and stimulating joint
experience. So enjoy!
Introduction
One of the biggest challenges for today’s management lies in the increasing
prevalence of data.This is frequently referred to as “big data”. A recent study by
IBM among chief marketing officers (CMOs) indeed reports that big data or
the explosion of data is considered a major business challenge (IBM, 2012). One
of the main underlying drivers of this explosion is the increasing digitalization
of our society, business and marketing. One can hardly imagine that consumers
around the globe nowadays could live without smartphones, tablets, Facebook
and Twitter. Marketing is probably one of the business disciplines most affected
by new developments in technology. In the last decades, technological devel-
opments such as increasing data-storage capacity, increasing analytical capacity,
increasing online usage, etc. have dramatically changed aspects of marketing.
More specifically, we have seen the development of customer relationship man-
agement, or CRM (Kumar & Reinartz, 2005). This arrival of CRM posed
challenges for marketing and raised issues on how to analyze and use all the
available customer data to create loyal and valuable customers (Verhoef &
Lemon, 2013). With the generation of even more data and other types of data,
such as text and unstructured data, firms consider how to use such data as
an even more important problem. A recent study by Leeflang and Verhoef in
joint cooperation with McKinsey confirms this (Leeflang, Verhoef, Dahlström,
& Freundt, 2014).They find that marketing is struggling with gaining customer
insights from the increasing amount of available data. According to McKinsey,
one of the main explanations is a lack of knowledge and skills on how to ana-
lyze data and how to create value from these data.
Explosion of data1
Data have been around for decades. However, thirty to forty years ago, these data
were usually available at an aggregate level, such as a yearly or monthly level.
With developments such as scanning technologies, weekly data became the
norm. In the 1990s, firms started to invest in large customer databases, result-
ing in the creation of records of millions of customers in which information
2 Big data challenges
on purchase behavior, marketing contacts, and other customer characteristics
were stored (Rigby, Reichheld, & Schefter, 2002). The arrival of the Internet
and more recently of social media have led to a further explosion of data, and
daily or even real-time data have become available to many firms. It is believed
that getting value from these data is an important growth engine and will be of
value to economies in the coming years (see Figure 1.1).
The Internet has become one of the most important marketplaces for trans-
actions of goods and services. For example, online consumer spending in the
United States already surpassed $100 billion in 2007, and the growth rates of
online demand for information goods, such as books, magazines, and software,
are between 25 and 50 percent (Albuquerque, Pavlidis, Chatow, Chen, & Jamal,
2012). In the United States digital music sales in 2011 exceeded physical sales
for the first time in history (Fisch, 2013). Besides B2C and B2B markets, online
C2C markets have grown in importance, with examples such as LuLu, eBay
and YouTube. The number of Internet users by the end of 2014 was over 279
million in the United States and more than 640 million in China (Internet Live
Stats, 2014). Worldwide, there are about 1.4 billion active users of Facebook at
the end of the first quarter of 2015. On average Twitter users follow five brands
(Ali, 2015). Companies are also increasingly investing in social media, indicated
by worldwide marketing spending on social networking sites of about $4.3 bil-
lion (Williamson, 2011). Managers invest in social media to create brand fans,
Energy 380-690
Trade 200-590
Infrastructure 270-320
Low estimate
Talent 165-265
High estimate
Der Corduan (so nach der Stadt Cordova, von den Franzosen
Maroquin, von den Engländern Morocco genannt) ist ein narbiges
Ziegenleder, von dem sich der Saffian nur durch seine Glätte
unterscheidet. Der Chagrin (persisch Sagre) ist wie mit runden
Körnchen übersät, was durch Hineintreten von Samenkörnern
hervorgebracht wird. Juchten ist meist Rinds- oder Pferdeleder,
welches mit Laugen, Beizen und Farbstoffen behandelt und durch
Birkenöl geschmeidig gemacht wird.
ZWEITES BUCH.
DER
BUCHDRUCKERKUNST
1500—1750.
EINFÜHRUNG IN DAS ZWEITE BUCH. [←]
Diese Hinneigung zum Holzschnitt war nicht dem Zufall oder nur
der Bequemlichkeit, für ihn zu zeichnen, zuzuschreiben, sondern sie
lag in den Verhältnissen tiefer begründet. Es konnte nicht anders
sein, als dass die Maler der Reformationszeit, welche Zeugen der
Segnungen der Erfindung Gutenbergs waren, die populärste Kunst,
die Xylographie, deren Erzeugnisse so leicht und so weit durch die
Druckerpresse verbreitet werden konnten, freudig begrüssen und
begierig eine Gelegenheit ergreifen würden, durch welche auch sie
berufen waren, an dem grossen Werke der Reformation thätig
mitzuwirken.
Somit war ein grosser Teil des zweiten und des dritten
Jahrhunderts der Buchdruckerkunst eine, dieser sehr ungünstige
Zeit, in der sie nothwendigerweise leiden musste, und erst das vierte
Jahrhundert sollte sie zum neuen Glanz wieder erstehen sehen.