Marketing faces more data, more demand for analytics

By Jim Schakenbach, Special to Mass High Tech

This is both a scary and exhilarating time to be in marketing and advertising, depending on your perspective. The meteoric rise of social media and the growing consumer power associated with it have been compounded by the proliferation of niche media channels and the diminishing impact of traditional broadcast and general interest media. As a result, marketers and advertising agencies are under increasing pressure to produce meaningful, measurable marketing campaigns to reach fractured target audiences.

As marketing professionals struggle to make sense of the expanding stream of data flowing from a wide variety of sources and platforms, it appears that the sector is entering what perhaps can be called the Analytics Era. Growing numbers of IT companies, software developers and advertising agencies are racing to aggregate, integrate, analyze and understand an astonishing amount of data from marketing programs, advertising campaigns and product purchasing reports.

They are attempting to turn all that data into usable information that can provide clues for creating even more effective messages and channels to influence consumer spending.

“As more devices and channels become available, it presents new challenges to marketers and advertisers,” said Kiki Mills, president of the Massachusetts Innovation & Technology Exchange (MITX) in Cambridge, an Internet business and marketing association. “Everyone’s collecting data, but how can they get meaningful data? That’s the bigger question.”

In response, new applications and technologies are emerging to manage and manipulate data throughout the entire promotion and purchasing process. It is perhaps no coincidence that several of this year’s MITX Technology Awards went to companies involved in some aspect of data management and analytics, including DataXu of Boston, an online advertising optimization platform developer and Modiv Media of Quincy, which is developing in-store systems for delivering targeted, real-time promotional and purchasing information to consumers.

MITX online advertising category winner DataXu is a company that is “taking a lot of data from the Internet — a lot of consumer data and media data and applying machine learning to basically recognize consumer patterns and media patterns that correlate to sales,” according to CEO Mike Baker. DataXu’s patent-pending technology was developed at MIT by its founders, creating a platform that uses real-time consumer preference data to value, bid-manage and buy ads on an impression-by-impression basis, across online ad exchanges operated by Google, Yahoo and others.

A little over a year old, DataXu is backed by Boston’s Flybridge Capital Partners and Atlas Venture, as well as West Coast venture firm, Menlo Ventures. The company launched in September 2009 at the TechCrunch50 conference in San Francisco, where it was recognized as having one of the top 50 hottest new products.

In a similar vein, Visual IQ Inc. of Needham, helps ad agencies, marketing firms and advertisers mine the growing glut of data across expanding media channels to better understand customers and determine how to reach them. As a former advertising executive, Visual IQ CEO Manu Mathew said he understands the pressure to find the most efficient channels.

“Today, to effectively reach the consumer, (you) have to hit them at different times with different messages in different channels,” he said. Visual IQ has developed a platform to help marketers “gain control of that data stack” and optimize their ad spend. A couple of years old and bootstrapped by its partners, Visual IQ is seeking venture funding to expand its sales force after landing such top shelf clients as AT&T and American Express.

Once customers have been lured into stores by advertisers using technology such as DataXu’s and Visual IQ’s, customized offers and discounts can be delivered to individual buyers based on buying profiles using technology developed by Modiv Media of Boston. Modiv built a business model around a trend called “shopper marketing,” which director of product management Matt Volpi said has advertisers “putting their campaigns in the mindset of the shopper instead of looking at the vehicle as the focus.”

Instead of using a particular channel to broadcast a generic offer to all customers, Modiv’s technology enables the retailer to mine customer purchasing history data to push a specific offer to individual customers based on their preferences.

So where is all of this going? In short, to a place where marketers can reach individual consumers with increasingly targeted messages across all channels, from websites to email to smartphones. But, cautions marketing analytics expert Cesar Brea, partner in marketing analytics firm Force Five Partners, there comes a point of diminishing returns.

“Maybe instead of integrating so many different data sources, you integrate, say, just three and execute really well in them, getting maybe 80 percent of the benefit without struggling with those many other sources and perhaps not executing as well.” 

Jim Schakenbach is a freelance writer in Jefferson.