Data Alone Will Not Save You

By: Oxford Road

In 2012, Harvard Business Review’s sexiest job of the 21st century was…Data Scientist? 

It’s no wonder, given today’s never-ending appetite for data. The prevalence and importance of analytics can be seen across all realms of business, and top universities have begun teaching data science as part of their curricula. Even top MBA programs are teaching tools and programming languages to prepare their students. Data and analytics have moved from almost exclusively IT and Finance into nearly every aspect of modern business. But, there is a deeper truth that few people talk openly about: data alone may do little to help your business, and when handled incorrectly can actually be painfully destructive.

The “data-driven decision making” trend prompted leaders to develop a nasty habit of looking for more data to prove any and all ideas. It became the be-all and end-all of everything. Despite this, the success of “data-driven decision making” depends less on how much data is available, but more on what you can do with it. For this model to be successful, we need to address the following challenges*:  

*This is not the exhaustive list, but the most common. 

1. Ask the Right Questions 
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2. Data Is Not Insight

• There is often a missing link between data and business value. That missing link is generating actionable insights. This occurs at the intersection of business understanding, analytical thinking, and the necessary data to prove/disprove the hypothesis.
• Example: You have two different CPAs for two different channels. One is for branded search at $20, and the other is for TV at $100. If you merely look at these numbers, TV at first glance is not very efficient. BUT, if you understand the interaction TV has on branded search’s performance, you will realize that the $100 CPA for TV could hypothetically come out to $60. This context is essential to deriving insights from data. 

3. Garbage In, Garbage Out

• By now most of us have accepted that no matter what we do, we are in the business of generating data. The reality, though, is most companies do not begin with a clear data strategy in mind, whatever their intentions may be. They usually start with a big idea, rush to market and worry about cleaning up the data and building a strong foundation after the fact. If you don’t start with the data strategy in mind, you will continuously be playing catch-up, most likely generating what is effectively garbage, and digging the hole deeper as you go along. 
• Example #1 (the bad): You’re a marketing manager, and you’re using 15 different tools to manage a marketing campaign, which means there are at least 15 different sources of data. Each tool tells a different story, so what ends up happening is you spend three months trying to stitch 15 different outputs together. You lose time and money, and your marketing goals become less and less achievable. Your marketing strategy now becomes one of constant fire drills and catching up. 
• Example #2 (the good): You’re a marketing manager, and you understand that data comes first. Because of this, you first layout your data strategy that can stitch vendors together in a holistic way. So, before you go ahead and pick the “cool” new vendor, you check if it will fit into your strategy. If yes, you’re good to go. If not, you need to keep looking elsewhere. Once you activate this vendor, you start to see how your whole story moves together without having to create an entirely new project to understand the impact of this new initiative.

In short, data alone will not save you. It can be your most powerful ally, but if not managed properly, your greatest enemy. Without the above three elements, no data-driven organization can produce value. We are in the advertising business, so we have the unique perspective toward companies who have done this well, but we also see, from time to time, the results of a poor data strategy and the destructive consequences that undermine important marketing efforts. If you ever need some truthful candor on how you stack up to others in your field, we would be glad to take a look. It can do wonders for your advertising programs.