Big Data is a term that both inspires and confuses many of us in the marketing industry. We hear about it at our conferences and in the boardroom on a daily basis. But what does it mean? And more importantly, what does it mean for your business?
In 2001, Gartner defined Big Data as “high-volume, high-velocity and high-variety.” How high is the volume? For some, we are talking data volumes in the exabytes (as a point of reference, 1 exabyte is 1 million gigabytes). High-velocity refers to the massive speed at which Big Data is collected and output. High-variety is the wide range of data sources such as mobile devices, credit bureaus, subscription services, social media, and retailers, to name a few. It is important to point out that Big Data is not one type of datum, it is all types of data—and it is all equally important.
Big Data is great for finding correlations and is highly useful in science and government and other areas in which there are enormous amounts of data with relatively little variability. Unfortunately, while Big Data can improve the reliability of predicting the next ‘snowpocalypse,’ it is not (by itself) great for predicting who will buy your latest products. Big Data is not magic, and it cannot find causation.
While Big Data is buzz-worthy, do not buy into the hype without knowing what you need. Know the data, tools, and team you need, and have a plan in place to act on what you find. In a 2012 report from Harvard Business Review titled “Good Data Won't Guarantee Good Decisions,” they stated that many companies are investing “tens of millions of dollars” in Big Data, but many of these same companies lack the skills and knowledge to analyze, organize, and—most importantly—act upon what they have collected. Big Data brokers will tell you that you need their gigantic data analysis software packages in order to remain competitive. You will be far more competitive if you only buy what you need. Stay lean. Do not buy an entire corn field if what you need are a couple of cobs for Friday night dinner.
If you are unsure of what you need, get an unbiased opinion. Hire a data consultant who can objectively analyze your business and advise you on exactly what your data needs are, as well as the need for tools and possibly a new team.
Can your company survive without Big Data? The answer depends on your industry, but for many the answer is yes—for now. You can still build predictive models without Big Data. The goal in using any prospect data—big or small—is to find predictive, actionable value. And you can still accomplish this with a relatively small data set. If you use the right sources with the right selection criteria and ask the proper queries, you can still find insights without super-software.
Nevertheless, Big Data is not a fad. It is here to stay, and its usefulness will evolve as platforms are developed and companies outfit themselves with robust data and intelligence teams.