Predictive marketing technology is the latest, exciting new tool to help marketers maximize their marketing spend on advertising campaigns.
Predictive marketing technology runs on predictive analytics based on big data to give marketers a complete view of the marketing solutions that are actually working.
“The promise of big data analytics is that marketers can analyze thousands of points of information about the digital activity of the purchaser—stripped of personally identifiable information—and combine it with their knowledge of television, radio, billboard, and print campaigns to tailor marketing messages and, ultimately, improve return on investment (ROI). With analysis, the numbers show how much lift each data point provided for each ad in each channel. With that data, marketers can make better decisions about how to allocate their ad budgets. Indeed, the analytics themselves will identify the smart choices.”
Marketing’s biggest challenge is determining the best media source to promote a product or service. “Historically, the most sophisticated marketers have relied on top-down ad campaign planning. They develop econometric models by looking at the distribution of the whole advertising budget. They analyze changes in allocation and one-time promotions and see how those changes affect their key performance indicators (KPIs), which may be making an in-store purchase, or opening a new account.”
But the digital world has brought about new changes and approaches. Marketers focus “on digital scoring of actions, starting from the bottom up with the KPI.” The buyer’s journey is now a digital journey and marketers are interested in every touch point along the way. Marketing technology allows marketers to see exactly what their prospects and potential buyers are doing at any point in their buyer’s journey. This data gives marketers access to “where a specific buyer saw their ads… [or] how long that buyer watched a video or lingered on a page carrying the ad.”
“Advanced predictive analytics can now figure out what audiences have been most responsive to an ad. Then the same algorithms can find similar audiences on other websites and present the ads to them. With enough data, and a good algorithm… [predictive marketing technology] can determine just which ads made a difference.”
One of the biggest benefits of predictive analytics is that marketers can see daily results of their online advertising activities in real time. This includes monitoring phony ads so they are not showing up as effective in your KPIs.
“Similarly, predictive analytics may discover correlations among categories of potential buyers that would be unlikely to occur to human marketers. For example, “While working with a luxury cosmetics company, [Digilant chief scientist Krishna Boppana recalls], Digilant discovered a correlation between women who were interested in exotic travel and those who bought Kashi cereal. While predictive analytics is often criticized for spotting correlation rather than causation, Boppana concludes that ‘advertising is all about correlation.'”
Source: MIT Technology Review
Image: Courtesy of Higher Ed Marketing
Glenn Gow is an expert in marketing performance, Coach, Board Advisor, Author, Speaker, Podcast Host and Founder & Advisor of Crimson Marketing. Follow me on Twitter, LinkedIn, Google+. To get a free copy of Crimson’s One-Page Marketing Metrics Funnel, visit here.