Why Marketers Fail with Analytics?

Last week’s blog, Why CMOs Rarely Become CEOs, was one of my more popular posts on LinkedIn. Over 15,000 visits and 125 comments. The comments were interesting. Most marketers were supportive with, “accurate though depressing”, probably being the summary.

As is to be expected, some disagreed. They pointed out that with the advent of big data, most marketers were now quantitative and had responsibility for driving the top line. To keep the blog easy to consume, I limit myself to a thousand words. As a result, I did not mention that in traditional companies, especially B2B, the top line responsibility is primarily with the sales function. When such a function does not exist, as in many start up online firms, then digital marketing must drive top line growth. In this latter situation, my blog is less relevant.

But what about big data in traditional companies? Is it not making marketers more quantitative, analytical, and financially accountable? My blog was observational, not prescriptive. I am a big believer in the potential of big data and will use my experience in the Tata group, without revealing confidential information, to demonstrate why many marketers fail with analytics.

Big Data at Tata

Early in my tenure at Tata as the head of group strategy, I was invited to make a presentation at NASSCOM (the apex body representing IT companies in India) on serving the connected customer. My big pitch was that “data is the new oil”. Intrigued by it, the Chairman, Cyrus Mistry, asked me to explore what Tata group should do. We agreed that the group companies, with a couple of exceptions, were slow in adopting big data and analytics.

The Group Policy & Strategy Forum periodically brought together CEOs from the group companies to discuss issues of common interest. At one of these forums, I argued that the Tata group touched an amazing number of Indian consumers. By some estimates, almost a billion Indians through the many products and services. No other corporate group came close.

My proposal, backed by Cyrus, was to launch an in house analytics company that would help the group companies with big data and analytics to make Tata world class on this (compared to traditional marketing organizations). The CEOs immediately saw the potential of this initiative at the corporate level. This was consistent with what I had observed in Marketing as Strategy, CEOs do not need to be convinced of the value of marketing. The onus is on marketers to deliver on the promise of the function.

Realizing that the talent did not exist in house, one needed to recruit a first class professional to head this new analytics venture. To gain internal support, I ensured that the proposed candidates were interviewed by a committee of executives from the operating companies, who would be users of this service. Chandra, who then headed TCS, was generous with his time. Together, we interviewed the finalists recommended by the committee. Out of this process, two candidates were forwarded to Cyrus for selection.

The outstanding new CEO was tasked with setting up the operation from scratch, including hiring data scientists who were in great demand. I recall Chandra advising me that this may be the constraint in scaling up successfully. Fortunately, by the time of my departure, the organization was in place.

Implementation Challenges

In discussing the challenges, I will draw from beyond the Tata experience. Please note that this blog is related to marketers in more traditional incumbent companies, not the digital upstarts, where marketers are digital natives. I will also not discuss the myths of big data, which may make for another blog. Also, big data is simply so much data that you are lost. Without the analytics to extract value from it, it is just cost.

  1. Many marketers, despite paying lip service to big data and analytics, are wary of analytics. Most marketers are social scientists or business majors, not engineers or physicists. As mentioned last week, they are more at home with the creative side. Managing massive amounts of data is outsourced to those statisticians who can make sense of it. It is human nature not to trust what one does not understand. In many cases, marketers realizing that digital is the hot new thing, have relabelled themselves as digital marketers, without the competences and the motivation to use analytics to rigorously confront marketing initiatives and expenditures.
  1. It was famously quipped: Half my marketing is wasted, but I don’t know which half! While, analytics offers the ability to know more, one must not forget there was a comfort in not knowing what works and playing by “gut feel”. Big Data combined with analytics brings greater accountability to marketing expenditures. In the long run, fighting this is a losing battle. However, in the short run, executives can be quite dysfunctional in resisting change. An unarticulated concern was having the corporate centre manage big data and analytics instead of an outside third party provider because the performance of marketers from operating companies would be clearly visible.
  1. Adoption is a journey. To start, one must stitch together data from different silos within the company that are reluctant to part with it. To complete the picture of online and offline interactions requires additional data acquisition from multiple external agencies. Furthermore, the data must be relentlessly refreshed. Without a refresh strategy, it is a wasting asset. Similarly, the analytical models are continuously upgraded.
Learnings
  • CEOs are convinced that marketing must become more analytical and big data is a transformational opportunity.
  • One must recruit for the best talent externally. Candidly, even if this is slowly changing, few firms have the required world class analytical capability in house.
  • The fear of many traditional marketers losing power and control is a major obstacle in large companies to the adoption of big data. Yes, some marketers are enthusiastic. But, be careful, in distinguishing between expressed versus real commitment to change.

Warmly

Nirmalya


Magic Dust

It’s cheaper to build e-business than to buy: Tatas’ top gun – TOI

I invite you to follow me on Twitter @ProfKumar and LinkedIn.

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