Updated: Sep 6, 2020
What is data and how does affect business? The simple answer is that data is information that provides insight into your industry. Not only that, data can provide insight down to incredible specifics on almost anything that you might need to know. For example, a digital marketing company such as ourselves may collect and analyze which industries have the most saturated markets, and from there decide which companies specifically need our services the most. Below are a few overview points to help you get familiar with data.
1.) Types of Data
Here are a few examples of types of data that are widely used across many industries:
Competitor Price Points
Competitor Ad Strategy
Most Valuable SEO & PPC Keywords
Demographics (Age, Location, Industry, Etc.)
Social Media Demographics by Interest
Market Saturation & Share
Sales KPI's (Key Performance Indicators)
You can probably see how data plays an enormous role in business just by knowing these points, but these examples are just the tip of the iceberg. Companies that can successfully collect and analyze their own sales KPI's, competitor strategies and pricing, client demographics, and client industry and market knowledge will essentially have the market in the palm of their hands while maximizing their own efficiency.
2.) Utilizing Data
Imagine you own a coffee shop in your city, and there are four competing coffee shops spread throughout the same city. At the end of the day you all sell coffee, so wouldn't the consumer just go to the closest or cheapest one? Not exactly. Imagine you knew what your competitors charged down to the penny, what kind of strategies they used to market their businesses, what keywords they use to show up on Google, and you knew how to target a social media ad campaign to the local consumer, almost individually, over their favorite platform.
What this would mean from the consumer point of view:
"Here I am on my favorite platform every day, and every day I see a coffee shop with great looking lattes and it looks beautiful inside."
"Wow! How'd it know I loved caramel soy?"
"It's not too expensive at all, I'm going to go try it out."
While this example was a bit corny, it is an accurate portrayal of how successfully targeted ads make you react in your mind. If you don't believe us, look at your own Instagram, Facebook and YouTube ads. I bet you've wondered from time to time if your phone is listening to you because those ads are so relevant. Fortunately, your phone is not listening to you (not that we know of). Every 'cookie' that you agree to when visiting a website, every search term that you use to look something up is stored and analyzed as data. Those incredibly specific ads are simply the output of ad campaigns centered around data.
3.) The Good, The Bad, and The Ugly
We've seen data put to good use in targeted ad campaigns. These companies use legally and ethically collected data to push their product to the right consumer. If you we're wondering how this can be taken too far and if it ever has been before, the answer is yes and here's how:
In 2016, a political consulting company called Cambridge Analytica used extreme data collection methods in order to harvest the private information of over 50 million Facebook profiles. The method they used is known as 'scraping', and while scraping is not necessarily illegal or unethical, the data that was targeted certainly is.
Cambridge Analytica aimed to find how who was the most "persuadable" among Facebook users, and thus who should be targeted by name for political advertisements. They did this by skimming millions of profiles, posts, comments and more, and then collecting hundreds of data points on each person.
CA's strategy was out of line because instead of collecting general public info, they dove deep into profiles and extracted enough data to essentially predict a persons personality. Cambridge Analytica has since been made an example to 'Big Data' companies as a "what not to do" case.
However, fear not as you embark on your data-driven journey! Data science is a very common and very ethical practice that will help your company increase sales and allocate every dollar to the right place. As with anything else, practice within the boundaries of people's privacy and trust.