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The Big Data-Driven Business WEBFTOC 10/29/2014 22:19:44 Page vi WEBFFIRS 10/29/2014 22:14:6 Page i THE BIG DATA- DRIVEN BUSINESS HOW TO USE BIG DATA TO WIN CUSTOMERS, BEAT COMPETITORS, AND BOOST PROFITS RUSSELL GLASS • SEAN CALLAHAN WEBFFIRS 10/29/2014 22:14:6 Page ii Cover design: Wiley Copyright 2015 by LinkedIn Corp. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at www.wiley.com/go/permissions. Limit of Liability/Disclaimer of Warranty: While the publisher and authors have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor the authors shall be liable for damages arising herefrom. For general information about our other products and services, please contact our Customer Care Department within the United States at (800) 762-2974, outside the United States at (317) 572-3993 or fax (317) 572-4002. Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com. ISBN 9781118889800 (cloth); ISBN 9781118889787 (ebk); ISBN 9781118889848 (ebk) Printed in the United States of America 10987654321 WEBFTOC 10/29/2014 22:19:43 Page iii Contents Acknowledgments vii Introduction: Why We Wrote This Book, and How It Can Help You ix 1 Big Data, Big Benefits 1 2 The Evolution of the Customer-Focused, Data-Driven Business 15 3 The Evolution of the Buyer’s Journey, or How the Internet Killed the Three-Martini Lunch 25 4 The Marketing Stack—Why CMOs and CIOs Are Working Together 35 The Software in the Stack 48 5 How Technology Bridges the Gap between Marketing and Sales 55 Technology Brings Harmony between Sales and Marketing at DocuSign 62 How Bizo Used Data to Boost Marketing–Sales Alignment 64 6 Data and the Rise of Online Advertising 69 Early Uses of Audience Data 72 Early Marketing Analytics—Audience Auditing 73 The Rise of Internet Advertising 74 Ad Networks 75 Audience Platforms 75 iii WEBFTOC 10/29/2014 22:19:43 Page iv iv Contents Online Advertising Exchanges 76 Retargeted Display Ads 77 Social Media Advertising’s Powerful Leap Forward 78 How Marketers Are Putting Data on Display 79 7 Using Data to Better Understand Customers and Pursue Prospects 85 Netflix Flexes Its Data Muscle 88 SaaS and Its Powerful Window on the Customer 90 The Power of Predictive Lead Modeling 91 Data Isn’t Reserved for Dot-Coms 93 8 The Arrival of Left-Brained Leaders and the Rise of the Marketing Department 97 9 Implementing a Big Data Plan (Sometimes by Thinking Small) 113 Eleven Principles to Follow When Bringing Big Data into Your Business 123 10 Measurement, Testing, and Attribution 133 Data and Measurement 136 Measuring the Power of Display Ads 138 Data and Testing 138 Data and Attribution 140 Attribution’s Big Day 144 11 Data Can Be a Matter of Corporate Life and Death 149 The Dead 155 Near-Death Experience 161 Culture Clash 162 Missed Opportunity 165 Whistling Past the Graveyard? 166 Schadenfreude? 167 12 Using Data Responsibly 169 Privacy and Online Advertising 173 Privacy and the Corporate Database 176 The Responsibility of Corporations 179 WEBFTOC 10/29/2014 22:19:43 Page v Contents v 13 Big Data’s Big Future 183 How Cleversafe Harnessed the Power of Data 187 Key Trends Defining Big Data’s Future 188 The Human Touch Remains Essential 206 Index 209 WEBFTOC 10/29/2014 22:19:44 Page vi WEBFACK 10/29/2014 22:11:42 Page vii Acknowledgments uss would like to thank his wife, Robin, and his three lovely R girls—Ava, Mackenzie, and Annika—for having the patience to put up with him every day. Sean would like to thank his wife, Nancy, and his daughters— Sophie and Charlotte—for understanding the occasional weekends and late nights that were devoted to writing this book. He would also like to thank his mom and dad for reading to him as a boy and giving him a lifelong love of stories. Together, Russ and Sean want to thank all of the Bizonians and our new colleagues at LinkedIn who helped with the creation of this book. They also thank all of the people who shared their insights with them and who were indispensable in shaping the ideas contained in this book. vii WEBFACK 10/29/2014 22:11:42 Page viii WEBFLAST 10/29/2014 22:16:56 Page ix Introduction: Why We Wrote This Book, and How It Can Help You e decided to write a book about big data and its impact on W businesses, after many years working in and around companies and with executives who were seeing, increasingly, how data could change the courses of their careers and the trajectories of the businesses they worked for. We also saw incredible big data stories starting to hit the public’s consciousness. There was Moneyball (W.W. Norton, 2003), the book by Michael Lewis about how Oakland Athletics general manager Billy Beane gained a huge advantage through big data. More recently, there was The Signal and the Noise (Penguin, 2012), Nate Silver’s book exploring why so many predictions fail because of a lack of big data—or because of a misinterpretation of it. Despite its obvious power, the understanding and use of big data have remained surprisingly sporadic in the business world. We see three types of people: 1. The Pioneers, who are embracing the troves of data that they have access to and who are truly transforming the way businesses are run and how customer communication is done. ix WEBFLAST 10/29/2014 22:16:56 Page x x Introduction: Why We Wrote This Book, and How It Can Help You 2. The Frozen, who either don’t know how to get started or don’t seem to want to uncover the truths that data might deliver. 3. The Denialists, who don’t believe that big data has any value to deliver and whose businesses are dead or dying. The first group is far outnumbered by the latter two. We realized that those people who are stuck can learn a great deal from the Pioneers who have come before them. These Pio- neers are not only breaking new ground but executing at a high level, and all the while they are solving technological, organiza- tional, and cultural issues to capture and use data to deliver outsized returns on investment. These Pioneers are delivering great experiences for their prospects and clients. They are giving rise to greater truth and better decisions by making more data available in boardrooms. And they are helping to create companies that truly understand what their customer needs are now and will be in the future. The people and stories we highlight in this book are designed to bring you insight into the first waves of a sea change in how business is and will be done. Not only have they already brought huge upside into their organizations, but they are also positioning their compa- nies to be long-term leaders in a highly competitive world. We hope you find the journey as interesting as we do and come away with some insights on why and how big data is changing and should change the way business functions—whether within tiny start-ups or within the largest enterprises in the world. Our thesis starts with a simple premise: the companies that most effectively use big data to gain insight into their customers and act on that data will win. Be data-driven and customer focused, and you will reap the benefits. We aim to show you how it’s being done, and how you can get started. But first, let’s go back to when the earth was still thought to be flat. WEBC01 10/29/2014 20:27:0 Page 1 CHAPTER 1 Big Data, Big Benefits WEBC01 10/29/2014 20:27:0 Page 2 WEBC01 10/29/2014 20:27:0 Page 3 ata, information, facts—whatever term you want to use, D collecting and analyzing data have played a crucial part in humankind’s ability to survive and to thrive since the dawn of consciousness.
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