Based on data, we understand customers in high resolution and use estimates to grasp the entire market

The competitive axis of current marketing activities is shifting to a quality perspective, using data that can be considered "the voice of the customer" to provide a more attractive and integrated brand experience. In an era when the source of a brand's competitiveness is not the appeal of specifications from the company's perspective, but the attractive experience value from the customer's perspective, how can companies create and provide an integrated and attractive experience value? This requires the planning and execution of marketing in a broad sense that goes beyond traditional marketing communication such as advertising. How should those in charge of marketing at business companies, and the partner companies that support their marketing activities, face the changing competitive axis? Yoshiaki Hirao of XICA and Ryoji Yanajima of Intimate Merger discussed the issue.

From "fishing" to "fishing", what we need now is sonar suggestions

What do you think about the challenges surrounding corporate marketing activities today?

Hirao:Some companies are refraining from marketing investments due to the COVID-19 pandemic, and advertising decisions are now being made based on a clear ROI. It can be said that we are now in an environment where there is a stronger demand for accountability for advertising investments than ever before. There are no longer any sanctuaries for advertising channels. I think that in all advertising activities, strict judgments are being made about the visualization of effects and contribution to the business.

Yanashima:The environment surrounding advertiser companies has changed in many ways, but what I have felt strongly recently is that the gap between companies that can adapt to the changes and those that cannot is widening. A situation that could be called polarization is emerging.

Do you think there will be any changes in the function and role of the marketing department?

Hirao:As there is a growing demand to visualize the contribution of marketing investment to business, I think an increasing number of companies are looking to have common indicators between management and the marketing department, or between the marketing department and other departments that work with the marketing department. Unlike indicators traditionally used by advertising departments, such as brand favorability and purchasing intent, there is a demand for indicators that are directly linked to business activities.

Yanashima:Collaboration with management and other departments through data is also important, and when considering measures such as protecting personal information, for example, collaboration between the legal department, information systems department, and marketing department is also necessary. Currently, many companies do not have a clear person in charge of making decisions regarding data utilization, so I think collaboration in this area is also a next challenge.

Hirao:I think that the trend towards stronger consideration of privacy in data utilization, as Yanashima-san just pointed out, has had a major impact. The revised Personal Information Protection Act came into effect in April, and I think that because it places restrictions on the acquisition and retention of data, there is now a demand for clear purposes for its use. I think it can be said that we are now in an era where data science is given more importance. In the past, there were companies that took the approach of "it's enough if we can just acquire data," but now there is a recognition that "it is necessary to derive correct suggestions from the data."

In terms of advertising activities, concerns have been raised about how to adapt to the cookie-less era.

Hirao:When you can track individuals using third-party cookie data, it may seem like you can realize marketing that utilizes data. However, with the recent cookie regulations, people are starting to wonder if this was the correct understanding.

Yanashima:Even if you understand and predict the behavior of 100 individuals, it doesn't mean you can predict the behavior of an entire segment. No matter how much you analyze individuals, you won't be able to derive an optimal marketing strategy for the whole.

Hirao:It is necessary to understand customers with high resolution as a single sample. However, it is also necessary to use estimations from that data and plan a strategy that captures the market as a whole, from an individual perspective. For data companies like us and Yanajima, the era in which such an approach to utilizing data is needed is something we have been waiting for.

Over the past decade or so, the concepts of one-to-one marketing and personalization have become widespread, and this may be influencing the awareness of companies.

Yanashima:Rather than optimizing for each individual and aiming to increase the number of conversions, I think we should aim to optimize the return on investment in marketing activities as a whole. I think that's exactly what XICA is working on.

Hirao:You're right.

Yanashima:Certainly, if cookie data could be used, it would be possible to take the approach of casting thousands of fishing rods to acquire individual users. However, what is needed in marketing is not fishing, but fishing. How can we acquire a larger market while keeping investments to a minimum? To do this, we need to use data that functions as sonar.

What are your thoughts on the role of external partner companies in supporting advertisers?

Yanashima:In the current situation where the practice of digital marketing is becoming more specialized and difficult, I think it is easier to achieve better results by working with a partner who has deep vertical knowledge rather than someone who has broad horizontal knowledge. However, it is quite difficult for a marketing department to bring together and manage people with individual expertise. The ideal situation would be to have someone who is capable of absorbing information from a group of experts and putting it into a common language.

Hirao:I think we should start by sharing information between advertisers and external partners, and among external partners themselves. Even if you are a group of experts, if you have an environment where everyone can fight for the same indicators and share the results immediately, you can move in the same direction.

The other day, I participated in a discussion where advertisers and creators were on stage together, and one of the creators expressed the opinion that it would be easier for them to do their work if they were informed of the KPIs set by advertisers and the status of their achievement.

How do you think data can be used to create customers?

Yanashima:I believe that marketing is not about predicting the future, but about initiating change. What is important at that time is "people's values." For example, when you look at the data and see that someone who had values ​​A last year has changed to values ​​B this year, I think it is useful to think of ways to reproduce that change in marketing hypothesis design.

Hirao:In particular, by analyzing marketing activities as a whole, we can see what kind of lifestyle our customers have, which will provide insights for our next steps. We at XICA would like to use our data analysis capabilities to make proposals that can be used to create future customers.

[Data-driven Total Marketing Optimization] Series

• Vol. 1: This article
• Vol. 2:Improve your targeting power with estimations and improve the ROI of your overall marketing activities
• Vol. 3:We live in an age where data can be used to provide new value. How should marketers approach data?

This article was published in the June 2022 issue of the monthly magazine "Sendenkaigi."