The Internet has changed much over the past two decades. Less visible than search, e-tail, on-line video and social networking, but as revolutionary in its own right, is the huge amount of data that companies now have to guide decision making. Before the Internet, marketing analysis was complex and expensive. More often than not, decisions came down to intuition. Today, hugely valuable, low-cost data is readily available to make profound decisions. No more sitting around a table debating the merits of one product name versus another. Instead, test them out. Ian Ayres, the author of Super Crunchers: Why Thinking-by-Numbers Is the New Way to Be Smart, used the subject of his book to choose its title. As Newsweek relates it, Ayres ran Google ads for alternate titles next to phrases like ‘data mining’. He selected the title with the most clicks. That is but one simple example. Many people track click-through rates for Google AdWords. Link click-throughs to purchases, though, and you’ll find out how valuable clicks are for each search term. You may find that some terms generate many clicks, but no sales. Eliminate those search terms and reallocate the dollars to terms that do lead to purchases. The result? Higher revenue and profit.

There are countless ways companies are using the new data wealth to improve marketing. The opportunity is there for all companies, but I give the edge to large companies who have traditionally relied on sophisticated data analysis, such as Home Depot and Proctor and Gamble, as well as to upstarts who appreciate the new order. Other companies that don’t adapt will incur an increasing handicap and ultimately fail.

Posted by Roger Greene
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