The Future is History: Using Historical Data to Foresee Your Campaign's Results Before its Launch
to drive your business with the power of data
Data and analytics have revolutionized fields the world over. In sports, Liverpool became the champions of Europe and England, the Houston Astros have had success in baseball, and the Warriors have revolutionized the way basketball is played forever – all using analytics to change how things are done. In agriculture, data analytics are changing the way farmers grow and provide their food. In healthcare – very much a field on everyone’s mind – analytics are allowing doctors to measure everything from heartbeats to calories, and combine huge amounts of data into actionable insights. In every field, analytics is changing the way things have been done in dramatic and exciting ways.
Marketing is a field that once was based much more on experience, feel, and the random notions of top executives. That’s the case no longer, as predictive analytics has taken over marketing, leading to campaigns being more tailored – and successful – than ever before.
How is Historical Data Used?
Predictive analytics means using data consolidated from the relevant history of several sources to predict how events might look in the future. One of the features of predictive analytics is that it focuses on trends and percentages of how things MIGHT turn out rather than the certainty that comes from more traditional methods (beware the marketer who says with certainty that, with a massive investment from your company, he will guarantee any particular ROI!). Instead, predictive analytics places a set data into an algorithm that is checked against how such campaigns have worked in the past – using as many data points as possible – and what it spits out is a set of the most likely outcomes for how yours will work into the future and how you might be able to optimize it.
And, like we’ve said, more and more companies are getting ahead using the power of historical data and analytics. By 2022, the global reach of predictive analytics is expected to grow to almost $11 billion, according to Zion Market Research, as it’s already been growing at an astounding compound rate of 21%.
Predictive analytics revenues/market size worldwide, from 2016 to 2022(in billion U.S. dollars)
Ways to See the Future of Your Campaign
1) Predicting Customer Behavior
Data can figure out how customers are most likely to act better than any other method, and particularly how they’ll act online. Matching behavioral data with customer journeys allows you to predict engagement points for where and when customers are most likely to convert. It also helps to pinpoint where along a customer journey you’re most likely to experience churn. These patterns give you numerous insights into how your campaign might operate so that you can achieve the outcomes you’re after by actually predicting when and where churn might occur. This in turn leads to greater levels of customer retention. Once you know who, when and how a customer is likely to churn, you can stop them at the source and ensure that they remain your loyal customer for longer.
Building customer models is another feature of predictive analytics. The Aberdeen Group performed a study finding that companies that used predictive analytics were twice as likely to be able to target high-value customers and market their product to them appropriately.
The major benefit of predictive analytics over traditional methods is that often findings can be completely counter intuitive. For instance, as Christmas approaches, you might think that marketing common Christmas gifts over the Christmas period is a simple matter of keeping up with trends, but analytics has shown that even that’s not so simple:
It turns out that different kinds of Christmas gifts sell at different times, so even the most simple of situations can change when you look at things analytically.
2) Refining Segmentation
Defining a target audience is part of every campaign, but predictive analytics can take it to the next level. One size doesn’t always fit all, of course, and oftentimes the most efficient approach is one that nurtures and segments customers based on highly specific behavioral and demographic data to help define content and generate sales.
These mean so much more than deciding that, say, uneducated white males over the age of 50 are more likely to legal weaponry and guns. Predictive analytics gives a full overview of a campaign’s projected costs, revenue, and profit compared with its size, so campaigns are actually sized perfectly in tune with marketing and business objectives.
In the graph below from SPSS, targeting a greater number of customers would actually lead to LESS profit, which again is not necessarily an intuitive outcome.
3) Anomaly – or Outlier – Detection
Anomaly detection, or outlier detection, or outlier analysis, is a way to use data to spot unusual differences in behavior right away. These can be data points, events, or observations that suggest mildly or wildly abnormal behavior. Once you have spotted this, you can begin working out what’s really going on. This means you can catch technical issues earlier, but more importantly it means you can see a business opportunity just as it’s cropping up, for instance a change in consumer behavior that allows you to benefit before anyone else has noticed it. Essentially platforms like Dataroid allow you to make better and faster decisions using Anomaly Detection.
There are massive amounts of data to analyze in fields the world over, and how to blend using this data with industrial know-how can be difficult for many companies. That’s why Dataroid features algorithms and artificial intelligence that blends these together to predict future behavior in remarkable ways. This holds just as true in marketing as in any other field, so if you’re looking to see which company is on the rise – in any field, from sports, to agriculture, to health care – just see which one is hooked most into investing in predictive analytics and you’ll have found which business is best at predicting the future.
Drive your digital growth
Schedule a demo today to learn more on how we can help you unleash the potential of digital using Dataroid.