One of ExchangeWire's industry insiders discusses one of the ac tech's key buzz phrases - 'big data' - and how it is now inextricably linked to CMOs, but also highlights how not all data is created equally, and warns marketers over the hazards of using third-data for strategic business decisions. 

There’s no denying that we live in a world dominated by data. Gartner predicts that enterprise data will grow 650% in the next five years. Also, through 2015, 85% of Fortune 500 organisations will be unable to exploit big data for competitive advantage.

'Big data' - the buzzword which refuses to retire was quite possibly originally an attempt to glamourise data in the hope of gaining the interest of C-suite executives and securing the business investment required to use data to increase revenue.

If that was the intent, then it’s certainly worked. If you search Google for 'big data, CMO' the search engine will return hundreds of publications describing how CMOs are investing in technology to help their organisations make the most of big data, how big data is in the top-five things CMOs care about, etc. The link between CMOs and big data has most definitely been made. According to Accenture, nearly 60% of execs worldwide say big data is 'extremely important'.

However, not all data is created equally. First-party data is data collected by an organisation. It may take the form of behavioural data collected from visitors to your website(s), mobile website(s), users of your apps, data stored in a CRM system, such as subscription or purchase history and also social data.

This data is highly desirable and valuable, it is high quality and the only cost associated with first-party data is the technology needed to capture, store and analyse it. Tesco is arguably the king of first-party data thanks to it’s Clubcard. A few years ago I was in a meeting with Tesco and Dunnhumby and learned that each quarter the Clubcard offers that are sent out to customers are never used more than twice!

Third-party data is a different kettle of fish. It is generated on platforms that are not part of your business and often aggregated from multiple properties. Third-party data is sold by companies to organisations to use for marketing purposes but care must be taken to ensure that bought third-party data is as relevant, fresh and actionable as possible.

Third-party data should be blended with first-party data where possible to increase relevance and ensure that a tailored outcome is reached. A word of warning, do not base strategic business decisions based solely on anonymous third-party data, you do not know where it has come from, how accurate it is, or how old it is!

These days there is also second-party data; first-party data that is bought directly from the source. The source could be a particular publisher, is often purchased via a DMP and offers specific data points, audiences, or hierarchies. Second party data can provide organisations with high-quality first party data providing access to previously unreachable audiences and insights.

All data brings with it challenges and opportunities that can be broadly boiled down into three pillars: Information Strategy, Data Analytics and Information Management and Action.

Information Strategy put simply, this is a plan of how to harness the power of the information you have at your disposal. Information strategy should be tightly aligned with the business goals. Different types of data will be better for different, if you want to increase market share, third-party data will open doors to new audiences. If you want to increase profit first party data will help you to identify who your most profitable customers are and the types of behavious they exhibit and allow you to focus your attention of increasing engagement with other similar customers who already show an interest in your brand.

Furthermore, organisations looking to leverage data need to be prepared to use the insight they get from this data to drive strategic decision making. If data disproves your initial strategy, you have to be prepared to admit that you were on the wrong track and take a new, more informed direction.

Data Analytics by 2015, Gartner predicts that 4.4 million jobs will be created around big data. When embracing data, it is incredibly important to assess whether your business have the 'data scientist' talent required to exploit big data? If not, it is vital to consider how to assemble the right teams and align skills and whether it is worth investing in external services to help you on your way? Data analytics allows you to predict future customer behaviours that is fundamental to getting ROI from your data investments. Data analytics can have an impact on more than just marketing activities, it can help you to decrease costs, improve customer satisfaction and drive new product innovation so make sure that data analytics does not exist in a silo.

Information Management and Action this is the fun part! You have goals, you have skilled people, you have data – what are you going to do with it? Firstly, let people use the data, don’t keep it squirrelled away protected with a virtual lock and key. Make the data accessible to marketing teams, customer experience teams, procurement teams, IT teams – in fact make the data available to any team which may be able to find insights, follow the old adage, many hands make light work. If you keep the data within your marketing team, you will get marketing insights but not customer insights etc. Use the knowledge in your business to assess whether you are making the most of your data, extracting the most value, integrating multiple sources of data with existing infrastructure and technology.

Above all, make sure what you’re investing in data is cost effective. There’s not a single organisation in the world that does not have data, or that could not benefit from better data and analysis. The key to success is making sure that as an organisation you’re setting yourself up for success make use of the first party data you have, putting technologies in place that can transport your first party data into various business initiatives from marketing automation to customer experience optimisation to product innovation.

Finally, if you are investing in third-party data, make sure that it’s from a trusted source, aligned with your business goals and make sure that you blend it with a good mix of first party insight.