The time has come when marketers who cannot use data as a weapon will not be able to survive.

The environment surrounding marketing continues to change, with diversification of media, changes in consumers' lifestyles due to the COVID-19 pandemic, and strengthening regulations on personal information protection.

The time has come when companies that cannot adapt to change will truly not survive.

So how should marketers, and by extension management, respond to these changes in the environment?
How can data inform your strategy?

Marketing-driven management led Nestle Japan to rapid growthKozo TakaokaMr. and CEO of XICA Inc., a company that supports data-driven marketing that does not rely solely on knowledge and experience.Yoshiaki HiraoFrom this dialogue, we will uncover the key points of marketing that is resilient to change.

The challenge of marketing in Japan is a lack of awareness of ROI

Kozo Takaoka (hereinafter Takaoka) 　I often get asked, "What changes have occurred in marketing due to the COVID-19 pandemic?"

However, there has been almost no sudden change as a result of the coronavirus."It's a change that's been there before but we haven't been willing to see."We were simply forced to respond in this way.

For example, DX (digital transformation). We have been told that we are in the digital age, but only a handful of companies have actually incorporated it into their marketing.

However, with COVID-19 restricting real-world activities, we have no choice but to use digital methods.

Yoshiaki Hirao (hereinafter Hirao) 　I interact with many marketers on a daily basis, and I strongly agree with your point that "change has simply accelerated."

We at XICA use data science to provide total support, from visualizing the effectiveness of advertising, including TV commercials, to optimal budget allocation, creative design, and planning and buying of TV commercials."ADVA"We are offering the following service.

We believe in the potential of data analysis and have been providing tools for about five years, but now more than ever before, due to the COVID-5 pandemicExpectations for this field are growing rapidlyI feel that.

Takaoka　I've known about XICA for a while. I think it's great that they've branched out into the realm of television commercials, where there's been very little testing done on effectiveness.

Foreign companies such as Nestle Japan (hereinafter referred to as Nestle), where I worked, rigorously analyze how much advertising investment, whether on television or digital, contributes to sales, i.e. ROI (Return on Investment).

This is because it is necessary to develop a medium- to long-term marketing strategy based on the idea of ​​"creating a long-lasting brand."

On the other hand, Japanese companies generally tend to create new products one after another and sell them quickly. Because they wanted to gain recognition first, they tended to put off verifying ROI.

Hirao　That was the problem I felt. As you know, Mr. Takaoka, in the West,MMM (Marketing Mix Modeling)Based on this, we have established a culture of visualizing various marketing activities using data.

However, in Japan, little attention has been paid to this aspect of "visualizing the effects."

However, the COVID-19 pandemic has led to increased cost awareness among management, and the accountability for marketing strategies has also increased.There is an increased need to visualize advertising ROII think it is.

Takaoka　That's true. I also knew the ROI of advertising measures, so I reduced our TV advertising budget from several billion yen to zero and launched the KitKat exam support campaign.

Because KitKat was already a well-known brand, the company switched to a strategy of spending its budget on areas other than gaining awareness, which is what television advertising is good at.

COVID-19 has changed people's attitudes towards ROI. From now on, the key will be whether a brand or service can determine "the measures that they should really invest in now."

Data is an essential element of "constructive debate"

Hirao　Mr. Takaoka, as someone who has been involved in marketing and management for a long time, what do you think is the difference between companies that have established marketing ROI and those that don't?

Takaoka　one,Do managers understand marketing?.

Identifying customer issues, creating and delivering products that solve those issues - I define this process, which could be said to cover all aspects of corporate activity, as "marketing," but unfortunately there are very few managers in Japan who have a proper understanding of this whole process.

There are great marketers in the field who understand these issues, but unless the awareness of the top management changes, it will not be reflected in budget allocation. Naturally, the resolution of the ROI of the entire company will remain low.

Hirao　In Japan, marketing is often treated as a cost center, but as Takaoka-san has proven at Nestle, it is actually management itself and a profit center that generates profits.

We support a wide variety of companies, and across the board, we sense a strong will from the leaders of companies with strong marketing.

Takaoka　Conversely, if the top management does not set clear goals, there will be inconsistencies when those on the front lines set KPIs and KGIs.

When discussions take place between the top management and the field, and among the field staff themselves, facts such as numbers and data are the basis. Since Nestlé is a foreign-owned company in particular, facts functioned as a common language for people with different languages ​​and backgrounds. 

On the other hand, in Japanese companies, there are too few discussions that use facts. Of course, decision-making based on experience and intuition is important, but I think it's dangerous to rely too much on them.

Hirao　In fact, we originally started out as a consulting business that utilized data for a variety of fields, not just marketing. 

But after a few years of doing this, I realized that most of my clients were marketers.In the world of marketing and advertising, there was little internal discussion about using data.I assume this is the case. 

So, to solve the problems marketers faced at the time, we developed a tool to visualize the effectiveness of online and offline advertising, including TV commercials."ADVA MAGELLAN".

Takaoka　That's great. Especially in Japanese companies, the opinions of the loudest voices often prevail, but if you have facts, you can have a constructive discussion.

 Facts are an essential element not only for marketing strategy but also for building a healthy marketing organization. 

No matter how talented a marketer is and how excellent their strategy is, it will be difficult to maintain motivation if policy is changed by a single, illogical decision.

Data analysis without a hypothesis is meaningless

Hirao　I've been in the world of data analysis for about 10 years, and one misconception I often hear is that "data = something that proves the past." 

Data analysis can help you look back at past initiatives, but companies that are getting results first make some kind of hypothesis, then:We are working on analysis for future measures.

 This "hypothesis" is very important. If you analyze the data without having an "axis" to look at, you will only get vague results.

Takaoka　I often say, "No matter how much consumer research you do, you won't be able to create a hit product or a great campaign." This is because you only look at the results and don't have a hypothesis.

Conversely, with the right hypothesis, any data can become a powerful weapon.

The same thing happened when Nestle created a coffee machine that could brew one cup at a time.

With the trend towards nuclear families becoming more prevalent, we hypothesized that many people would prefer to brew coffee one cup at a time, rather than using traditional coffee machines that can make four or five cups at once. 

When we analyzed this through a survey, we found that there was a lot of support for the idea, which led to it being commercialized.

Hirao　I often ask my clients,The important thing is to follow the sequence of "purpose → problem awareness → hypothesis → data analysis → decision-making"I suggest that without a purpose, you cannot identify the problem, and without a sense of problem awareness, you cannot come up with a hypothesis. 

Furthermore, you can't do good analysis without a hypothesis...and when you start with the "means" of data analysis while the purpose and hypothesis are still vague, it's no mistake that data analysis becomes the "end."

It may be a little strange for us who provide analytical tools to say this (laughs), but no matter how much the techniques evolve, in the end it comes down to whether or not you are really thinking about your customers. I think that is what determines the success or failure of your marketing.

Takaoka　In the end, it's all about how much you can think with your own head. 

People often say that we live in an age of rapid change, but in reality, very few people really think about the nature of those changes. 

I define change as Mr. Hirao just said.How have customer problems changed?It is placed as follows. 

It's natural for the external environment to change, so you have to first think about what the customer in front of you is struggling with and what they want. If you don't face that, you'll just be at the mercy of the changes.

People who spend all their time on "creating materials"

Takaoka　However, when we look at the marketing world, only a handful of people are able to devote time to thinking. 

Some data suggests that marketers can only spend 7% of their time thinking, with much of their time being taken up by creating materials and collecting data. 

This is more of a system issue than an individual marketer issue, but to be honest, creating materials is not a job but a task.Few people are able to "discover and solve customer issues"is a problem.

Hirao　As technology advances and tasks become more automated, the gap between those who actually work in marketing and those who don't will continue to widen. 

This ties in with what I said earlier, but people who can grasp objectives and hypotheses can use data to develop strategies and implement the PDCA cycle during the execution phase. 

Rather than resorting to short-term cost per acquisition (CPA) and the like, we must always see things from the same perspective as business managers.

Takaoka　That's right. The important thing is to "think" and then "execute," and there are a lot of things you can't understand until you actually try them out. 

Of course, brands and services that are chosen by customers have a great strategy in itself, but they also absorb feedback as they execute it and make sure to improve it. 

I believe that XICA's ADVA series has taken its current form as a result of trial and error in trying to solve the problem of ``analyzing the effectiveness of TV commercials,'' a problem that customers previously thought was impossible, and by incorporating the various experiences they gained in the process.

Hirao　Thank you. Indeed, the analysis business was started based on customer needs, and the advertising agency business that we started later was also a service that we developed in response to requests for support not only in the analysis phase but also in the implementation phase. 

Even if you can obtain analytical results, if you cannot use them in your next strategy, it will be nothing but pie in the sky. So we expanded our services to provide comprehensive support.

Takaoka　When you think about it that way, what we talked about in the data analysis section about the importance of hypotheses is also true when building a business. 

To reiterate, marketing and business that are resilient to change have the goal of solving customer problems.Have the hypotheses for this been verified?That's all.

I want to emphasize that it's okay to be wrong at the hypothesis stage, because by repeating the process, new hypotheses will emerge and you will get closer to the correct answer.

Hirao　You're right. And because data is a powerful weapon for verifying hypotheses, I would like marketers, and in fact all companies, to make use of data science. 

We will continue to experiment in order to spread data-driven marketing, which has yet to take hold in Japan.

[Edited by] Tomoka Takahashi and Shiho Otaka
[Photography] Ayako Koike and Wataru Goto
[Design] Kyosuke Tsukimori
This article was covered and published by NewsPicks Brand Design and is published with permission by our company.