By Kevin Gray and Peter Fader
Marketing scientist Kevin Gray asks Wharton Professor Peter Fader some questions many marketers are asking themselves.
KG: Marketing has undergone some dramatic changes in the past ten years or so. What has changed that matters most to marketers?
PF: That’s a tricky question: if it’s really what does matter most to marketers, the answer is social media; if it’s what should matter most, the answer is better, cleaner, richer transaction data. The former is so sexy and intriguing and makes it much more interesting to be a marketer, but it really doesn’t matter as much as we think it does. The latter is boring but is so very important.
KG: Sometimes it’s easy to lose sight of important things that have remained pretty much the same. Are there important things that haven’t changed very much in the past decade?
PF: As just noted, most of the really important stuff hasn’t changed. People try things once or twice, occasionally buy/engage with them more regularly, and then drop out and move on to the next thing. Again, it sounds boring but that’s the way it’s always been, and the basic patterns are surprisingly similar. Yes, people have more options and more ways to buy/engage with that stuff, but consumers are basically as loyal (or not) as they’ve ever been.
KG: We hear a lot about Big Data, the Internet of Things and Artificial Intelligence. How much impact are they actually having on marketing and marketing research? What about ten years from now?
PF: Most of that stuff is just hype, at least for now. Marketers need to walk (i.e., make smart use of simple data) before they can run with complex data. I’d like to believe that, ten years from now, they’ll be running, but I’m not overly optimistic.
KG: “Data, data everywhere, Nor any drop to drink” is one complaint I’ve heard from marketers on more than one occasion. “Big data, little information” is another. How can marketers prioritize? What sort of information should they be seeking and what sort of data should they focus on?
PF: Start with what matters most: understanding and forecasting basic transaction patterns. That was the core of basic marketing research 50 years ago, and should still be today. They extend from there in three ways: (1) dig deeper into the attitudinal underpinnings of that behaviour, (2) estimate the influences of marketing activities and other external factors, and (3) move outward from basic transaction patterns toward more advanced constructs such as retention and lifetime value. Then you can start to layer on the “nice to know” data structures such as social media and social network structures. But too many marketers are jumping right into the complex stuff, and that’s problematic.
KG: Lastly, what are the trends or new developments in marketing that marketing researchers should pay most attention to over the next few years?
PF: There are a lot of “shiny objects” coming into view when it comes to measuring/understanding customers. This includes beacons (for in-store movement), all sorts of IoT possibilities (as you noted), personal measurements (from fitness trackers), natural language processing, reading faces/emotions, and a zillion new ways to see social connections. Virtually all of them are in the “nice to know” category that I just mentioned. But the one that really intrigues me is neuroimaging. Right now, it’s way early to say anything definitive or practical (i.e., on a commercial scale) about it, but the possibilities are fascinating. This could be the one area of measurement, more than any other, that eventually outperforms observable behavioural data. Marketing researchers must embrace this domain and find ways to fully leverage it. Down the road, our ability to fully harness neurological activities will be the grandest way for “Big Data” to finally deliver on its promise.
KG: Thank you, Peter!