Data Science: Why it really matters

First, what does Data Science actually mean? It is a field of Big Data and seeks to provide meaningful information and insights from large amounts of complex data. Data Science combines statistics and computation in order to interpret data for solving business problems and making better decisions. Companies in industries such as finance, healthcare, retail, or internet employ Data Scientists to use their data effectively.

Information & Data Explosion

Data is one of the most valuable assets today, and we live in a world that is generating an enormous amount of it. Not only is data getting even more each year, but the rate at which data is being generated is accelerating. The following graph illustrates the increasing volume. The global amount of data created will jump from 16 Zettabytes in 2017 to 160 Zettabytes in 2025, according to a IDC report.

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Source: IDC's Data Age 2025 study, sponsored by Seagate, March 2017

Here’s a breakdown to make the number a little more tangible: 1 Zettabyte = 1 Thousand Exabytes = 1 Million Petabytes = 1 Billion Terabytes = 1 Trillion Gigabytes.  Or to place that amount of volume in more practical terms, an Exabyte equals to approximately 36,000 years worth of HD quality video, and a Zettabyte is thousand times as much. It’s mind-boggling, and the massive amount of information will certainly affect people, organizations, and society. Therefore, it’s essential to learn how to cope with data and extract value from it.

Let’s look what causes the explosion of data:

  • Expanding use of the internet and world wide web from people around the globe.
  • Increasing number of users with access to computing power and bandwidth.
  • Interaction of users with online applications such as video, gaming, or file sharing.
  • Growth of social networks, e.g. Facebook, Twitter, LinkedIn, WhatsApp, Instagram.
  • Shift towards online advertising and creation of specific content for online purposes.
  • Internet of Things (IoT): Everyday objects collect, process and exchange data.
  • Mobile technologies change the way to live, work, travel, shop, and stay connected.

The explosion of data & information is inevitable, so how do different industries deal with the opportunity?

Data Science in the Real World

It’s fair to say that most companies have adopted data science to execute the business strategy and run business operations. Primary goals are mostly around customer experience, cost reduction, marketing and making processes more efficient. Here are a few examples of how certain industries leverage data to their advantage.

Finance

There’s a flood of financial data including real-time market feeds, social media activity, mobile interactions, customer service records, transaction details; and the list goes on. For example, Data Scientists in the finance industry use Sentiment Analysis (aka opinion mining) to discover what people really think. Another application is Automated Risk Credit Management to gauge whether someone is creditworthy. And fighting financial fraud is also an area where data science can make a positive impact.

Healthcare

The healthcare industry generates large amounts of data, however, it is overpriced and inefficient; particularly in the United States. Data Science can be a rescue as it has the potential to help physicians make better decisions – from personalized treatments to preventive care. Especially the latter could help to slash costs significantly.  Furthermore, it can help to analyze genomic data, leverage public health data and process records of past treatments.

Internet

Internet companies are in a strong position to take advantage of data science. Data is already in a digital format available, and there’s just a lot of it (Facebook generates 4 Petabytes of data per day, 2016). There are opportunities in marketing, cross-selling, customized offers, or personalized products; the possibilities are endless. Customer data is being accumulated like never before, and users receive offers depending on buying patterns, search histories, and behavioral analysis.

Pharmaceutical

The pharmaceutical industry is being haunted by high product failure rates. Only three out of every 20 approved drugs bring in enough revenue to cover developmental costs, and only one out of every three approved drugs can create enough income to cover the development costs of prior failures. Low ‘discovered compound’ to ‘approved drug’ ratio, and the high costs of research characterizes this industry. However, Data Science can help to reduce risks by predicting future trends, improving marketing practices, and bettering research.

Insurance

This industry benefits from more available data than ever before: social media, website analytics, smart phones, CCTV footage, satellite data, among others. Based on rich consumer information and behavior, insurance companies use data science to predict trends, improve pricing policies, offer personalized products, and better customer relationships. For example, through combining analytical applications with real-time data, companies are able to create detailed and personalized assessments of risk.

Job Market for Data Scientists

Harvard Business Review famously coined Data Science as the sexiest job of the 21st century (link to article). Not sure whether any job can be called sexy, however, the catchy phrase has helped to raise awareness for that profession. And actually, Data Scientists are in higher demand than ever. There's a clear shortage of candidates with relevant knowledge and experience compared to the demand from companies that want to make use of their data.

Take a look at Indeed's job trends regarding Data Science. It's a "bull market". The number of job postings is steadily growing despite small dips along the way. And there's a strong case that this trend will continue. As mentioned before, the amount of data is rapidly increasing, and companies need people who can analyze it to drive business value.

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Source: Indeed Job Trends

Glassdoor provides yearly job market reports based on insights generated by its users. In 2016 and 2017, Data Scientist jobs have reached the top of Glassdoor's Best Jobs in America list. And although, the ranking is focused on the U.S. job market, one can assume that Data Science is sought-after across the world.

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Source: Glassdoor, 50 Best Jobs in America

And last not but not least, IBM predicts that annual demand for the fast-growing new roles of data scientist, data developers, and data engineers will reach nearly 700,000 openings in the United States by 2020. Also, the number of jobs for all U.S. data professionals will increase by 364,000 openings to 2,720,000 (link to article). IBM urges to close the existing skills-gap; otherwise, businesses won't be able to fill all open positions.

In conclusion, the amount of data is increasing at an unprecedented pace and accelerating, and companies in various industries take advantage of the flood of information to drive insights and value to the business. The role of Data Scientists become more and more important, and perhaps the label of the sexiest job of the 21st century is actually not that bad :)

Content is king, and what about context?

Content marketing has become one of the key tactics in marketing. By providing informative, educational and promotional content, marketers are able to attract and engage with current and potential customers. The popular phrase "content is king" signifies the importance of content in influencing consumers and businesses toward the end-goal of a purchase being made.

One only has to look at the job descriptions of today's marketing roles to find requirements such as "outstanding copywriting skills," "can write in different styles for different audiences with ease," or "exceptional writer with an ability to write with humor and playfulness." Being able to create enticing content certainly is an integral part of marketing campaigns, and therefore one of the most desirable skills for marketers.

– Excellent Content is Insufficient

Producing blog posts, articles, white papers, or videos is critically important for successful content marketing. Yet that is - however well done - incomplete. If an excellent piece of content doesn't provide value for the intended target group, it has essentially failed its purpose. Creating customer value should always be at the center of a marketer's mindset.

Therefore, context is the framework for refining content, but what does that exactly mean? Context implies delivering the right content, to the right people, at the right time.

In other words, content becomes contextual when it speaks to the target audience's immediate interests, activities, and goals they want to accomplish right now. It is a compelling concept, and very important for lead nurturing.

To better understand the power of context, think about Amazon and Google. These companies have mastered contextual content delivery, and successfully implemented this strategy in their services.

  • Amazon: Combines purchase data from millions of people and the users own search history to make highly targeted product recommendations.

  • Google Adwords: Presents context-sensitive and personalized advertising in the users search results based on narrowly defined terms and keywords.

Example: Email Marketing Drip Campaign

An email marketing drip campaign is a good example of putting content in context. Drip marketing is a term describing a series of auto-responder emails that are sent out to customers. These emails are based on either specific time intervals or recipient actions (=context) to move a customer along the buying life cycle of awareness => consideration => purchase.

For example, one executes an email campaign targeting a segmented customer list with a particular message. If opened, one moves to the next stage and sends the recipient a link to a related document, free resource, etc.; or if ignored, the recipient will receive a different message. By sending emails including content based on the recipient's previous actions, it is possible to create very effective marketing campaigns.

The following infographic, published in a blog post by Matt Wesson (Content Marketing Manager at Salesforce), offers a nice overview of a drip campaign's process and benefits.

 (Click image to enlarge)

(Click image to enlarge)

Content is key to connecting with a target audience and building strong relationships. However, great content by itself doesn't necessarily accomplish those fundamental marketing goals. In order to be highly effective, content has to be embedded in customer circumstances – only then can it provide significant value.

In a nutshell, again, the main guideline for content marketing is putting content in context: delivering the right content, to the right people, at the right time.

Marketing is a mindset, not a toolset

As a marketer in today's online-driven environment, one has countless tools at hand that can support customer acquisition, retention and engagement. However, is someone who knows tools automatically a good marketer?

Scott Brinker posted on his Chief Marketing Technologist Blog an incredible overview of the marketing technology landscape. Although not a comprehensive graphic, it shows the staggering number of 947 companies (!) that provide software for marketers. Of course, it is great to have such a wide range of tools, but also overwhelming.

 (Click the image to enlarge.)

(Click the image to enlarge.)

It is certainly a challenge if not impossible to stay on top of all the latest software trends, even within one category. Although these tools are essential to be an effective marketer, they are only a means to an end.

Eventually, the objective is to identify target audiences, to establish communication channels, and to build strong relationships. This is what marketing is about.

Therefore, understanding the fundamentals first is key: market dynamics, customer needs and desires, value creation for both the company and the customer, these insights are the core of a competent marketer's mindset. And once this big picture is understood, marketing can become a very powerful force.

The big moment for tools comes after. They are the instruments to carry out specific tasks (email marketing, SEO,  online advertising, webinars, etc.) that realize customer acquisition, retention and engagement strategies. However, without the appropriate mindset, they just remain random tools with no direction.

Marketing is a way of thinking and not the knowledge of how to use tools. It takes a few days to familiarize oneself with a new tool, but it takes years to develop the mindset that is able to truly connect with markets and customers. Therefore, use software tools for marketing campaigns and activities, but also keep in mind that they are only as good as the person using them.

Email is not dead

Email is still one of the most effective communication channels. Although social media has now a significant share of customer-company interactions, it is the fleeting nature of social media (an extreme example is the short lifespan of Snapchat messages) that makes it less suitable for certain interactions. Compared to social media, email is a more personal and intimate channel allowing (and requiring) a different messaging. 

One of the biggest advantages of email is that it is a very cost effective and highly measurable channel. Also, most internet users have an email account, and it often is the primary way to sign up for a new service. This is very powerful as marketers can use email as the first touch point with a new customer and start working on building a relationship immediately. I believe that email is a much better tool for retaining and engaging customers than for acquiring new customers. On top of the funnel, other tools such as SEO, SEM, social media or content marketing will lead to much better results.

There are many awesome email marketing tools available that allow even marketers without coding skills to run sophisticated campaigns. The usual suspects are: ExactTarget, VerticalResponse, Constant Contact, MailChimp, SendGrid and Customer.io (a pretty cool newcomer).

The three main types of emails are:

  • Newsletters (emails regularly distributed to a subscriber list).
  • Behavioral (emails are automatically sent when users trigger certain conditions).
  • Transactional (emails inform users that something happened on their account).

In general, email shouldn't be seen as an isolated marketing instrument, but it has to be integrated in holistic marketing campaigns and customer relationship management systems. 

A drawback of email is that it is literally used by everybody, and most people suffer from email overload. Not only do companies frequently send emails to their customers, but people obviously also receive private emails. The work email address usually gets even more abused by the bad habit of employees of putting too many people on the carbon copy list. As a result, there is a fine line between email as an effective communication channel and as a distractor with negative consequences in terms of image and reputation.

So what should marketers be aware of regarding their email marketing activities?

I believe one of the key aspects is providing value. An email has to include relevant and important content that the recipient really cares about. Please don't just try to sell stuff by sending all the people in your database a daily sales pitch email. This is not a sustainable way to grow a business and to build lasting relationships. Make it also easy for your customers to change the frequency and/or type of emails they want to receive. They are clearly the owners of their email inbox, and companies should give them the power to control it.

Email is definitely not dead and still a powerful communication channel. It is important that marketers use this tool wisely and think twice before sending out emails. The content always has to be highly valuable for the recipient.

Growth marketing

I recently started to get more into growth marketing. The term for this marketing technique is actually growth hacking, and was coined by Sean Ellis (here's the link to the original blog post). However, I prefer to replace the word 'hacking' with 'marketing'. Perhaps it is because I have a business and not an engineering background. But anyway, in the end these are details and don't really matter. It is the idea behind growth marketing that is fascinating.

First of all, growth marketing is a mindset and not a toolset, and it is particularly geared towards startup companies that have limited resources and depend on rapid growth for survival. The goal is to foster growth by developing ideas for new marketing channels, constantly running experiments, and making intensive use of metrics to test hypotheses. A growth marketer needs to be creative and analytical at the same, and should be able to think outside of traditional marketing concepts such as the 4Ps.

The tactics used are actually similar to online marketing. For example, both use paid acquisition, search engine optimization, content marketing, and/or email campaigns to optimize the conversion funnel and reduce friction. However, growth marketing is closer to product development as it involves, for example, viral in-product features or product design. Therefore, growth marketers quite often have an engineering instead of a business background, so the term growth hackers makes sense.

There are many good examples of companies that have successfully implemented innovative growth strategies. I want to mention three of the most well-known:

  • Hotmail put at the bottom of each email a simple "PS: I love you. Get your free e-mail at Hotmail."
  • Dropbox used an in-product referral program that provided both the referee and referrer a really enticing incentive: more storage (at very low marginal cost).
  • Airbnb developed an easy-to-use Craigslist integration to post Airbnb listings to a platform with millions of existing users and massive traction.

If you are interested in learning more about growth marketing, check out this recent KISSmetrics blog post or join the GrowthHackers community.

The multiplicity of marketing

I am often surprised about how people perceive marketing. It is reduced to a single dimension: advertising. Certainly, this is an important component of the marketing mix that is commonly known as the 4Ps (product, place, price, promotion), but marketing is much broader and more strategic than many people think. Therefore, I sometimes have to battle against the erroneous notion that marketers typically only produce catchy slogans and a lot of fluff. That is not my perspective on marketing, and I clearly see my role as a marketer as being more substantial.

Marketing is mainly about understanding the market, communicating the product's value proposition, and building relationships with customers. What does this exactly mean in terms of a marketer's responsibilities?

  • Planning to set goals and to define the target market.
  • Positioning to differentiate the product in the market.
  • Creating campaigns to acquire, retain and engage customers.
  • Messaging to clearly communicate the value of the product.
  • Using quantitative analysis to improve marketing effectiveness.

Many companies in Silicon Valley are driven by engineering talent. This is great, because good engineers are obsessed with building awesome products, and this is the foundation of any successful marketing. If a company offers an inferior product, it is very hard to market it and achieve sustainable growth. However, I also believe that marketers are as critical as engineers in every organization ensuring that product development and market requirements do not diverge.

The focus should always be on the customer; however, it becomes increasingly difficult to get their attention and loyalty. Today's global markets are changing rapidly, and empowered customers have almost an infinite number of choices. This makes marketing even more important, as the motto "If you build it, they will come." does not work anymore. Hence, I see my role as a marketer as not only feeding development teams the information necessary to build the right products, but also making sure that customers have an outstanding experience with the company and its products.

Marketing is very exciting, and this is why I am really passionate about it. I hope that more people will start to understand the power of marketing, and that it is much more than a commercial on TV.