Beyond the Firewall: Why Business Intelligence Matters To Advertising

“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Khurrum Malik, CMO at eXelate.

Advertisers who fully grasp the interplay between ad tech and Business Intelligence (BI) will maximize customer lifetime value in the accelerating digital world. Here’s why.

In the late ’90s, relational databases and the advent of Customer Relationship Management (CRM) laid the foundation for today’s BI industry. Players like Siebel, Oracle and even JD Edwards pushed enterprises to capture and retain data about their customers to grow their base. Then came a need to analyze and report customer information with BI tools like Cognos and Crystal Reports.

Fast forward to today’s BI market.  One sees a thick ecosystem of software (Microstrategy, IBM, Alteryx, Domo) and services (Accenture, Deloitte), providers who are chasing a multibillion-dollar market dedicated to helping businesses analyze and optimize performance.  BI has evolved from simple reporting to predictive analytics,  demonstrating a hunger to answer as many customer questions as possible – all behind or at the firewall.  It is important to note that a majority of this spend is controlled by enterprise CIOs who are dedicated to maximizing the value of technology investments, but who are also sometimes at odds with CMOs.

Enter the ad tech and digital advertising ecosystem, built to fulfill the needs of the CMO – specifically, the needs of advertisers to improve awareness, consideration, and eventually acquisition of customers through digital channels.  When a potential customer is in the awareness and consideration phase, ad tech nudges the customer forward to acquisition.  But this ecosystem must realize it is only part of the customer journey.  With billions of dollars being spent on improving digital funnel performance from customer awareness to consideration to acquisition, companies across the ad tech industry are wondering if there is more they can do to meet the needs of advertisers worldwide – and not just play outside the firewall.

Imagine a major wireless company; let’s call it Horizon Wireless.  Horizon’s marketing team wants to acquire as many customers as possible, retain them as long as possible, and grow (upsell, cross-sell) their customers – all to maximize customer lifetime value.  In order to meet these goals, Horizon utilizes the ad tech ecosystem to raise awareness and drive consideration for potential customers; however, once Horizon acquires customers, BI plays a larger role in retaining and growing them.

So why should advertisers care about BI?  Three major reasons pop out:

1. Size Matters – The Business Intelligence market isn’t going away.  With analysts sizing the market anywhere from $12B to $30B-plus and growing at double-digit rates, BI will continue to capture enterprise budgets and deepen relationships with both the CIO and, increasingly, the CMO.
2. Expansion – Almost all BI players are recognizing the ad tech impact and utilizing legacy BI/enterprise data with ad tech smart data to drive smarter decisions and accelerate the customer journey.  Why not take first-party customer conversion data and use that to seed online third-party smart data, more effectively targeting many potential customers?
3. New Advantage – Companies that can lay out a strategy and execution plan which demonstrates the right mix of ad tech and BI interplay are poised to flourish, capturing the mindshare and budgets of CIOs and CMOs worldwide.

Some companies are already positioning to take advantage of this trend:

1. Software/SaaS – Industry leaders like Microsoft, Adobe and IBM already see this dynamic and are investing within and outside the enterprise to accelerate the customer journey. Another example is Salesforce’s move to purchase Buddy Media.
2. Services – Players like Accenture and Deloitte are pushing their comfort zones beyond BI and analytics to help clients influence customers earlier in the customer journey.
3. Ad Tech – Companies like comScore are bridging this gap with audience, advertising and digital analytics across the customer journey, while agencies like Merkle and R/GA are moving proactively to carve pre- and post- acquisition inroads with CMOs.  Industry giants like Facebook are already pushing across customer touchpoints by positioning themselves as a one-stop shop for awareness and brand growth.

The time for behind-the-firewall (BI) and beyond-the-firewall (ad tech) collaboration is here. Only those who can bridge the gap and accelerate the customer journey will survive the shifting digital landscape.

Follow Khurrum Malik (@trihoos) and AdExchanger (@adexchanger) on Twitter.