Importance of Digital Marketing and Big Data for Businesses

I recently came across an article from McKinsey that talks about an annual survey that McKinsey conducted about the key trends in digital business, the extent to which companies are investing in new digital technologies, and the value that they expect to reap from these investments. Below are few highlights from this article that talks about the importance of digital marketing and big data:

• It appears that most C-level executives say the three key trends in digital business—namely, big data and analytics, digital marketing and social-media tools, and the use of new delivery platforms such as cloud computing and mobility—are strategic priorities at their companies. 
• These executives have high expectations for the potential value their companies can generate from the three trends, and one-third of them even expect digital business to increase operating income by more than 10 percent over the next three years.
• Of the three key business technology trends the survey asked about, just more than half of all respondents say their organizations have made two of them—big data and analytics and digital marketing and social tools—at least a top-ten corporate priority on their strategic agendas.
• Executives also say their companies view these digital business trends more as offensive strategic weapons than as defensive moves. About half of respondents indicate their organizations’ primary objective in addressing big data, digital marketing, or flexible platforms is using the technology to build a competitive advantage in their existing business.
• The results indicate that companies are indeed supporting these priorities in their budgets: one-quarter of respondents expect their organizations to spend at least 3 percent of their total cost base on digital business initiatives this year.
• The pace at which respondents say their organizations are adopting different practices, however, varies greatly. With big data, 49 percent say their companies are focusing their efforts on customer insights, segmentation, and targeting to improve overall performance; an even higher share say their companies should focus their efforts on using data and analytics to generate these insights.
• Most respondents say their companies use digital marketing techniques either to position and brand material across channels or to engage customers through social-media channels at least selectively, while the adoption of other practices is more modest. A slight majority say their companies use social technologies to improve customer engagement, while fewer have deployed these tools internally or with business partners. McKinsey says that companies are still building the foundations for new delivery platforms such as cloud or mobile; not surprisingly, respondents say their own organizations’ efforts are focused on the more basic functions in these areas.

Tough challenges ahead: Despite their optimism, executives consistently cite two challenges in fulfilling the promise of digital technologies: organizational structures and shortcomings in their infrastructure and IT systems, which can be too inflexible or ill equipped to take advantage of a data-rich world.