How is Big Data helping shape the Future of Advertising?

“Big data is at the foundation of all the megatrends that are happening.” – Chris Lynch, American Writer of Books

 

The media and advertising industry are those fields where digitalization is happening at a huge rate. They are becoming more data driven and a revolution has been brought when it comes to data and analytics. Recent trends have shown that since the past years data driven digitalization and big data technology has reached almost $57 billion and is expected to grow even more in future.

 

Big data has the potential to provide ample opportunities to many data-driven industries including advertising, media, online advertising. It has the potential to bring changes in the most potent aspect of the market that is “customer behavior”. 

 

Advertising is all about attracting customers and delivering them product knowledge. If done right, advertising can lead to more sales and more brand value. Therefore, if a company can understand consumer behaviour and patterns then it can capture the market share for a longer time. With big data all this is possible.

 

In this blog you will read about the role of big data in the advertising sector and various ways in which it has brought a revolution in this field. 

 

(Take a look at what are the factors influencing Consumer Behavior)

 

What is big data?

 

It is a set of data with a large volume which grows exponentially. This data is so complex that traditional data management and analysis tools will not work on it. In simple words we can say that big data is data with huge volume.

 

“You can have data without information, but you cannot have information without data.” – By Daniel Keys Moran

 

It is rightly said that we can have data without information but information without data is not possible. This implies that data interpretation and analysis are equally important and necessary in order to generate meaningful information out of data.

 

Types of Big Data

 

There are four variables which define the characteristics of big data. Those are volume, velocity, variety and variability. Mostly in the advertising sector heterogeneous big data is used. Heterogeneous data is an unstructured set of big data. Let us discuss the types of big data.

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Types of big data

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1. Structured

 

Data which can be stored, processed and accessed in a fixed format is called structured data. Data stored in DBMS is called structured data. 

 

2. Semi-structured

 

Data that contains a mix of structured and unstructured data is called semi-structured data. For example, data in an XML file is semi-structured.

 

3. Unstructured

 

Data with an unknown form or structure is called unstructured data. This type of data faces multiple challenges while processing information out of it. For example- heterogeneous data that contains multiple files in different formats is unstructured data. 

 

In advertising and media unstructured big data is used as the consumer behaviour is studied through different source like phone calls, messages, chats and social media usage.

 

(Related blog - Advantages of Big Data)

 

Big data in Advertising

 

One of the main reasons why advertising companies and media houses adopt big data is that it helps to reduce the cost. With such high competition it becomes difficult to survive and generate high revenues. Therefore with the opportunities that big data provides to them, they can shape a better future. 

 

“Big data will spell the death of customer segmentation and force the marketer to understand each customer as an individual within 18 months or risk being left in the dust.” – Ginni Rometty

 

The above quote very well portrays the importance of big data and how it can induce various sectors like marketing, advertising and media to grow even better. Given below are some of the ways in which big data has helped in shaping the future of the advertising industry.

 

1. Predicting the audience

 

While advertising a product or service it is important to provide the right content and information to people at the right time and on an approachable platform. With big data the overall potential to understand the audience has improved. 

 

What people like, which movie they will prefer and ultimately what the consumers want will be solved. Platforms like facebook, Youtube are able to predict what their audience will prefer and they are using it to put relevant content on their platforms.

 

2. Increased Targeted Advertising

 

Advertising in the traditional phase was done through assumptions. By assumptions we mean that companies had little or no idea about the segment that will buy their products. 

 

There were no insights about when people watch the ads and at what time. With big data it is possible to study consumer behavior and analyse their social media usage hours. Micro-segments are made so that targeted advertising can take place and the audience being targeted can be approached at the right time.

 

3. Increase customer retention

 

With the help of big data the overall customer retention of the companies has increased. People use different platforms and social media to check out a product, read its reviews and look for other options. 

 

Companies are now able to design strategies for customer retention. They can understand the likes and dislikes of their audiences. Most of the data is unstructured. Calls, chats, messages, emails etc between the company and the customers are looked for in order to understand the customers better.

 

4. Content Monetization

 

With the help of big data and other analytics tools companies are able to generate revenue through different sources. For example- a company TWC which is owned by IBM uses big data to understand customer behaviour with changes in weather conditions.

 

With this companies can display those advertisements in the break that consumers like and are more ought to buy. So, additional revenues through advertising is possible by using big data analytics.

 

5. Optimization

 

Customers have a direct link with the distributors now. Earlier there was a gap but now the distributors can approach the customers without any middle-man or agent. With the help of social media they can maintain a healthy personal relationship. This will help them earn more. 

 

Overall optimization of companies with the help of analytics and big data has improved over time. Companies can make quick decisions about which platforms customers would prefer, what they like, which content they will choose at a point of time and on which device.

 

 

Real industries that have used Big Data in Advertising

 

Big data has created a whole system wherein customer behaviour is the main focus. No wonder advertising and media is based on the end-user impact and experiences that it left with the audience. Here are some companies that have adopted big data in the advertising sector to optimize and improve the efficiency of overall businesses.

 

• Coca-Cola

 

This famous company has adopted big data in order to retain customers. In the year 2015 coca-cola started a digital program to strengthen its strategy. In an interview the director of the company said that big data analytics was behind their customer retention. 

 

Adopting big data at an initial stage was what made this brand popular. They showed the content in the right way to the right audience. This is the main reason why their products are popular among the youth.

 

• Netflix

 

It is one of those OTT platforms that has used big data in order to target the right audience for advertising their services. There are more than 100 million subscribers of Netflix and it is still growing. 

 

The data handling of Netflix has made it extremely popular. If you are on Netflix then you will know that they send you suggestions based on what you saw. These suggestions match our preferences and we watch more content and spend more time on the app. 

 

These suggestions and content updation according to the preferences of their customers has made them one of the most watched OTT platforms during the pandemic as well.

 

• Amazon fresh and whole foods

 

Advertising is about bringing the right goods and services to the right consumers. With change in tastes and preferences of people the company might need to bring innovations in the products. 

 

The best example of a company that has used big data to bring product innovation is Amazon fresh and whole foods. They understand how their users purchase groceries and with big data better insights are given.

 

Future of the advertising industry is possible by integration of technology, analytics and digitization.