If you’re a small business owner or a professional managing your company’s digital marketing strategy, you're likely aware of the impact big data can have. Data from Allied Market Research shows the global big data and business analytics market is worth US$225.3 billion (A$347 billion) in 2024 and is projected to reach $665.7 billion by 2033.
While big data is transforming many global industries, its impact on digital marketing is especially significant. The social media analytics market alone – a main component of many digital marketing strategies – is projected to grow from US$7 billion in 2021 to over $26 billion in 2028, according to Statista.
The profound influence of big data is largely due to its key characteristics, the four v’s: volume, velocity, variety, and veracity. Here’s a look at how the four v’s of big data improve digital marketing activities, now and in the future.
The 4 v’s of big data
Big data refers to the large volume of data – both structured and unstructured – that businesses create and use on a day-to-day basis. It’s too complex to be parsed with traditional tools like spreadsheets and manual data analysis and is typically characterised by four core concepts: volume, velocity, variety, and veracity.
Volume
The chief characteristic of big data is simply how much of it there is. Big data can be culled from various sources, including:
- Point-of-sale (POS) systems: which collect a vast amount of customer and transactional data to reveal purchasing trends.
- Web traffic data: data from social media platforms, e-commerce sites, and search engines that provide insight into customers' online behaviour.
- Smart inventory management systems: which leverage tools like radio frequency identification (RFID) tags and Internet of Things (IoT) devices to track inventory data in real-time.
- Customer feedback tools: such as online and in-person surveys, reviews, and social media mentions.
Velocity
Big data statistics can be delivered much faster than conventional data thanks to emerging technologies such as:
- Cloud: cloud-based services allow small businesses to access and analyse data quickly, without needing extensive infrastructure.
- IoT technology: a network of physical devices that collect and share data over the internet.
- 5G data streaming: which enable faster data transmission speeds.
- RFID tags: these small electronic devices are attached to inventory items to track their movement in real-time.
Variety
Big data comes in a variety of formats, including:
- Ad responses: such as click-through rates or engagement metrics.
- Social media sentiment: or the analysis of customer feelings or attitudes expressed in social media posts.
- Email actions: including metrics like open rates and conversions.
Veracity
This refers to the accuracy and trustworthiness of big data thanks to:
- Large sample sizes: which reduce the margin of error and bias, providing a more accurate reflection of market trends and a business’s customer base.
- Real-time data collection: allowing businesses to make decisions based on the most current information, increasing the reliability of strategies.
- Data validation and cleaning processes: enabling businesses to check for and correct inaccuracies, inconsistencies, and duplications to ensure the integrity and quality of data.
The role of big data in digital marketing
Big data can play many roles in digital marketing. Among the most prevalent are:
- Audience segmentation: big data allows marketers to compile, explore, and analyse various aspects of behavioural criteria, such as how people use their products and services. It also provides a window into social and demographic factors. The findings can help companies more efficiently determine consumer personas and preferences, making it easier to enhance and optimise marketing messages accordingly.
- Sentiment analysis: by analysing hordes of data from social media posts, reviews, and search queries, marketers better understand how consumers feel about their brand and products.
- Targeted marketing: big data analytics can deliver more relevant content to consumers by informing product recommendations, social media advertisements, and email drip campaigns.
- Predictive and prescriptive analysis: using data, statistical algorithms, and machine learning techniques, companies can use predictive analysis to forecast future consumer behaviours and trends. Prescriptive analysis takes this a step further to suggest actionable strategies based on these predictions.
- Result measurement: big data analytics make it possible to track, measure, and adjust campaigns in real time, helping companies optimise their digital marketing budget and right-size expenditures.
Potential benefits of using big data in digital marketing
Big data is a cornerstone of data-driven decision-making in digital marketing. It helps companies create more effective and targeted marketing strategies.
Here are a few areas where big data strongly benefits digital marketing efforts:
- Conducting competitive analysis: big data enables businesses to conduct a thorough competitive landscape analysis by aggregating and examining data from various sources, such as competitor websites, social media activity, and customer feedback on competitor products. This insight helps companies understand their competitors’ strengths and weaknesses in real-time, allowing for more strategic decision-making.
- Understanding market trends: analysing historical data patterns helps businesses understand market trends. This predictive analysis, coupled with actionable insights from prescriptive analysis, provides foresight over market shifts and consumer demands, enabling businesses to proactively adapt strategies.
- Enhancing customer experience: big data analytics helps companies create personalised customer experiences – from customised product recommendations to tailored marketing messages – to enhance satisfaction and loyalty.
- Reduced advertising expenditure: through targeted digital marketing campaigns that focus resources on the most receptive audiences.
- Increasing profitability: aligning marketing efforts more closely with consumer preferences and behaviours improves conversion rates and customer retention, ultimately boosting profitability.
Big data sources to refine your digital marketing strategy
If you’re looking at ways to make big data work for your business, you’ll want to consider as many data sources as possible. Online sources, like website traffic analytics and social media interactions, can be valuable, but there are many other sources.
Resources such as in-store kiosks, smart point-of-sale systems, and inventory management systems are often invaluable for gathering data on customer behaviour, preferences, and buying patterns. These tools provide insights into customer interactions and spending habits, as well as critical information on stock levels, product demand, and supply chain efficiency.
Encompassing both online and physical data, this comprehensive view of business data can be key to crafting well-informed marketing strategies, from product promotions to posting product availability alerts and everything in-between.
That said, it can be vital to make sure your data is sourced from reputable and reliable channels. Accuracy and trustworthiness directly impacts the effectiveness of digital marketing strategies. For instance, verified customer feedback helps guarantee the strategies built on this data are based on actual customer interactions and behaviours, not on erroneous or misleading information.
The future of digital marketing with big data
Big data’s role in digital marketing is still growing. Integrating big data with real-world analytics can present challenges, such as difficulties integrating a complex variety of data from multiple sources, a lack of advanced analytics skills and the need for robust data management systems. While these hurdles can be daunting barriers to entry, there are cloud-based tools that make big data analytics easier, even for smaller companies without the capital for major upfront infrastructure investments.
Advancements in IoT, mobile technology, and AI assistants are also increasing the speed and accuracy at which data is collected, leading to more precise digital marketing strategies. Companies are leveraging this data to create better retargeting campaigns, craft more relevant product suggestions, and deliver advertising content that resonates deeper than ever before.
Despite these advancements, consumers are becoming more aware of – and concerned about – how their data is used and protected, making transparency and respect for privacy essential in maintaining trust and brand reputation. As big data continues to evolve, companies must navigate these privacy concerns carefully to build and maintain customer trust.
Key takeaways
"Big data" is more than just a buzzword. For many businesses, it’s becoming a pivotal element of a successful digital marketing strategy. From providing deep insights into customer behaviour to enhancing targeted marketing efforts, big data empowers businesses to make informed, data-driven decisions.
While addressing challenges such as data integration complexity and privacy concerns is important, there are significant advantages of incorporating big data science into digital marketing activities. Businesses that effectively harness the power of big data will improve customer engagement, increase profitability, and secure a competitive edge in their market.