Database Marketing: From “Time=Money” to “Data=Success”

This is it.

The post where the more technical aspects of the digital marketing culminate into one topic. A/B testing? It’ll be covered. SQL? It’ll be covered. Databases? I’ll get to it.

So, databases, why should we, as marketers care about them, and how are they useful? For one, I would check out my previous post where I discuss the aspects of SQL and it’s advantages for marketing professionals. But that’s just the tip of the iceberg. SQL is just what we use to communicate with databases. It barely discusses the importance of “big data” (buzzword that will probably reappear in this post at least 10 more times). Big data is pretty much the aggregation of all of the data company records for each individual customers. This can be used for things such as what products a customer likes to buy (such as types of coffee), what kinds of movies you’ll go see (remember John Carter?), and even if you are pregnant (something I’ve discussed before). So, why are databases so important?

It’s pretty simple. The more information you have on your customers/perspective clients, the better you can suit their needs. Time may equal money, but nowadays data equals success. We are living in the age of start ups, where you can pretty much start a business doing anything you want. If there is a market for it, then you can sell it. But, how do you know who is buying what? What if it isn’t effective. Enter databases: larger collections of data used to store whatever information you have on your customers. So, you may think that time=money, but if you have a lot of data, you don’t really need time. You have all the time in the world (so long as you don’t go out of business, you DO need to make money somehow). You start-up may take a while to get off the ground and be popular. But if you are able to collect data on who is buying your product, then you can target your audience in a much more cost effective manner, thereby reducing the need to rely on the adage of “Time=Money”. Want an example of databases in action? Well, if you have the right team, with the right data, you can help win a presidency.


Mind blowing

So, how is that even possible? Well for one, lots and lots of A/B testing. It was disclosed after the election that the Obama campaign tested about 17-18 different emails. That’s an insane amount of data to analyze after the testing was completed. So, what were the determining factors for which email format to use? Donation amount. That was pretty much the main purpose of the email campaign. The lowest one brought in an estimated $400,600. As far as campaign money goes, that’s not that much. The winner however, brought in about $2.5 million. That’s a huge difference. “Yeah, that just proves how important A/B testing is. How does that relate to databases?”

Well, as this article says, “the days of politicians saying the same thing over and over are done. It’s all about telling the voters exactly what they want to hear: data-driven pandering”. Information is quickly becoming one of the most important parts to a campaign, even more so than money. Why? Because money comes from data. As the email testing showed, the difference between two emails can be huge (about a $2 million difference). Depending on what segment you are in can even change what email you get. Some people might not respond to a call-to-action based on Sarah Jessica Parker (notice there is no link to a Family Guy video). If data can help raise money, doesn’t that make it more important than the money itself? I think there is a pretty strong argument for that.

So, who was behind the Obama re-election campaign (at least the online portion of it)? May I present to you Harper Reed; certified cool guy/hipster (I guess hipsters ARE the definition of cool though, right?) Reed determined that one of the best things for the campaign to do was to compile a database of all of the people who had voted for Obama in the 2008 election. This was paired with the database that the DNC had, so that they might be able to reach a wider audience, and have a more complete picture as to who these voters are. This was an incredibly effective tool, because it allowed for the campaign managers to see who was probably going to vote for Obama, and how they could potentially influence them.

This is where the marketing comes in. Essentially, all of the voters can be broken down into segments based on a variety of things. There could be a mom with kids, a working professional, or someone who is a hipster. From there, marketers can figure out what the best channels to reach these segments are, when to reach them, and how to retain their interest. Pretty much, it’s a much more effective marketing technique for politicians, which previously relied on tactics such as canvasing to try and reach a wider audience. So, databases? Check. A/B testing? Check. SQL? …

60s Spiderman

I thought I could get away without mentioning it…

How does SQL fit into all of this? Well for one, it allows the marketers to search for certain criteria within the database. Say they want to look at all of the people who are on their list, and have one child. Through SQL they would be able to narrow down their data field so that it is easier to pick through exactly what those people are interested in. Then they could create a couple of emails, try both of them (A/B testing strikes again), and compare the results. I’ll go out on a limb here and say that the search criteria is far too vague, so they would then narrow down the data again (using SQL) and then start another batch of emails (more A/B testing). They would then continue this until they found the *perfect* email.

Does this sound time consuming? Most definitely. But when the campaign is pretty much to help someone who is trying to be president… You can expect a very time consuming process. In fact, Harper Reed once said that the only time he was really stressed about the work he was doing was when he was CTO for the campaign. Hipsters don’t like being stressed… Or so I’m told.

So there you have it: Databases. While maintaining databases isn’t necessarily part of a marketing job description, it goes along with coding and SQL. It definitely cannot hurt to know it. Instead of relying on an IT person, or statistician, you can analyze these databases yourself, cutting down on the time required per query. Even though the saying may be “Time=Money”, can’t that also mean that the MORE time you put into something, the more money you can get out of it? Or maybe it should be “Testing=Money”. Although, that may be true, the meaning could be lost. After all, testing does cost some money. So, therefore, I propose we enter into our society a new phrase: “Data=Success”. Time may be money, but if you don’t know your customers, then you probably won’t last as long as the company who knows their customers interests and buying patterns.

Data=Success. That has a nice ring to it.