Marketing Analytics

Introductory Chapter

What is AI?
Artificial intelligence (AI) is the ability of a computer program or a machine to learn, think and
decide like a human being.
How are businesses using AI & analytics?
Artificial intelligence (AI) is steadily passing into everyday business use. From workflow
management to trend predictions, AI has many different uses in business. It also provides new
business opportunities.
Application of artificial intelligence in business:
1. Improve customer services - e.g. use virtual assistant programs to provide real-time
support to users (for example, with billing and other tasks).
2. Automate workloads - e.g. collect and analyze data from smart sensors, or use machine
learning (ML) algorithms to categorize work, automatically route service requests, etc.
3. Optimize logistics - e.g. use AI-powered image recognition tools to monitor and optimize
your infrastructure, plan transport routes, etc.
4. Increase manufacturing output and efficiency - e.g. automate production line by
integrating industrial robots into your workflow and teaching them to perform labor-
intensive or mundane tasks.
5. Prevent outages - e.g. use anomaly detection techniques to identify patterns that are likely
to disrupt your business, such as an IT outage. Specific AI software may also help you to
detect and deter security intrusions.
6. Predict performance - e.g. use AI applications to determine when you might reach
performance goals, such as response time to help desk calls.
7. Predict behavior - e.g. use ML algorithms to analyze patterns of online behavior to, for
example, serve tailored product offers, detect credit card fraud or target appropriate
adverts.
8. Manage and analyze your data - e.g. AI can help you interpret and mine your data more
efficiently than ever before and provide meaningful insight into your assets, your brand,
staff or customers.
9. Improve your marketing and advertising - for example, effectively track user behavior
and automate many routine marketing tasks.

1
Examples of artificial intelligence use in business
Artificial intelligence (AI) is all around us. You have likely used it on your daily commute,
searching the web or checking your latest social media feed.
Whether you're aware of it or not, AI has a massive effect on your life, as well as your business.
Here are some examples of AI that you may already be using daily.
Artificial intelligence in business management
Applications of AI in business management include:
• spam filters
• smart email categorization
• voice to text features
• smart personal assistants, such as Siri, Cortana and Google Now
• automated responders and online customer support
• process automation
• sales and business forecasting
• security surveillance
• smart devices that adjust according to behavior
• automated insights, especially for data-driven industries (e.g. financial services or e-
commerce)
Artificial intelligence in e-commerce
AI in e-commerce can be evident in:
• smart searches and relevance features
• personalization as a service
• product recommendations and purchase predictions
• fraud detection and prevention for online transactions
• dynamic price optimization
Artificial intelligence in marketing
Examples of AI in marketing include:
• recommendations and content curation
• personalization of news feeds
• pattern and image recognition
• language recognition - to digest unstructured data from customers and sales prospects
• ad targeting and optimized, real-time bidding
• customer segmentation
• social semantics and sentiment analysis
• automated web design
• predictive customer service

2
Big data
Big data is a term that describes the large volume of data – both structured and unstructured –
that inundates a business on a day-to-day basis. But it’s not the amount of data that’s important.
It’s what organizations do with the data that matters. Big data can be analyzed for insights that
lead to better decisions and strategic business moves. Big data is larger, more complex data sets,
especially from new data sources. These data sets are so voluminous that traditional data
processing software just can’t manage them. But these massive volumes of data can be used to
address business problems you wouldn’t have been able to tackle before.
3 Vs of big data
The term “big data” refers to data that is so large, fast or complex that it’s difficult or impossible
to process using traditional methods. The act of accessing and storing large amounts of
information for analytics has been around a long time. But the concept of big data gained
momentum in the early 2000s when industry analyst Doug Laney articulated the now-
mainstream definition of big data as the three V’s:
Volume: Organizations collect data from a variety of sources, including business transactions,
smart (IoT) devices, industrial equipment, videos, social media and more. In the past, storing it
would have been a problem – but cheaper storage on platforms like data lakes and Hadoop have
eased the burden.
Velocity: With the growth in the Internet of Things, data streams in to businesses at an
unprecedented speed and must be handled in a timely manner. RFID tags, sensors and smart
meters are driving the need to deal with these torrents of data in near-real time.
Variety: Data comes in all types of formats – from structured, numeric data in traditional
databases to unstructured text documents, emails, videos, audios, stock ticker data and financial
transactions.

Volume The amount of data matters. With big data, you’ll have to process
high volumes of low-density, unstructured data. This can be data
of unknown value, such as Twitter data feeds, clickstreams on a
webpage or a mobile app, or sensor-enabled equipment. For some
organizations, this might be tens of terabytes of data. For others, it
may be hundreds of petabytes.

Velocity Velocity is the fast rate at which data is received and (perhaps)
acted on. Normally, the highest velocity of data streams directly
into memory versus being written to disk. Some internet-enabled
smart products operate in real time or near real time and will
require real-time evaluation and action.

3
 Variety Variety refers to the many types of data that are available.
Traditional data types were structured and fit neatly in a relational
database. With the rise of big data, data comes in new
unstructured data types. Unstructured and semi-structured data
types, such as text, audio, and video, require additional
preprocessing to derive meaning and support metadata.

How Big Data Works?

Big data gives you new insights that open up new opportunities and business models. Getting
started involves three key actions:
1. Integrate
Big data brings together data from many disparate sources and applications. Traditional data
integration mechanisms, such as ETL (extract, transform, and load) generally aren’t up to the
task. It requires new strategies and technologies to analyze big data sets at terabyte, or even
petabyte, scale.
During integration, you need to bring in the data, process it, and make sure it’s formatted and
available in a form that your business analysts can get started with.
2. Manage
Big data requires storage. Your storage solution can be in the cloud, on premises, or both. You
can store your data in any form you want and bring your desired processing requirements and
necessary process engines to those data sets on an on-demand basis. Many people choose their
storage solution according to where their data is currently residing. The cloud is gradually
gaining popularity because it supports your current compute requirements and enables you to
spin up resources as needed.
3. Analyze
Your investment in big data pays off when you analyze and act on your data. Get new clarity
with a visual analysis of your varied data sets. Explore the data further to make new discoveries.
Share your findings with others. Build data models with machine learning and artificial
intelligence. Put your data to work.

4
What is Marketing Analytics?
A practice of measuring, analyzing and managing marketing performance to maximize its
effectiveness and optimize the return on investment. It transforms data into insight for making
better business decisions. It enables us to make data-driven decisions rather than decisions that
are intuitive or based on observation alone.
Types of data analytics:
There are 4 different types of analytics. Here, we start with the simplest one and go further to the
more sophisticated types. As it happens, the more complex an analysis is, the more value it
brings.

Descriptive analytics
Descriptive analytics answers the question of what happened. Let us bring an example from
ScienceSoft’s practice: having analyzed monthly revenue and income per product group, and the
total quantity of metal parts produced per month, a manufacturer was able to answer a series of
‘what happened’ questions and decide on focus product categories.
Descriptive analytics juggles raw data from multiple data sources to give valuable insights into
the past. However, these findings simply signal that something is wrong or right, without
explaining why. For this reason, our data consultants don’t recommend highly data-driven
companies to settle for descriptive analytics only, they’d rather combine it with other types of
data analytics.

5
Predictive analytics
Predictive analytics tells what is likely to happen. It uses the findings of descriptive and
diagnostic analytics to detect clusters and exceptions, and to predict future trends, which makes it
a valuable tool for forecasting. Check ScienceSoft’s case study to get details on how advanced
data analytics allowed a leading FMCG company to predict what they could expect after
changing brand positioning.
Predictive analytics belongs to advanced analytics types and brings many advantages like
sophisticated analysis based on machine or deep learning and proactive approach that predictions
enable. However, our data consultants state it clearly: forecasting is just an estimate, the
accuracy of which highly depends on data quality and stability of the situation, so it requires
careful treatment and continuous optimization.
Prescriptive analytics
The purpose of prescriptive analytics is to literally prescribe what action to take to eliminate a
future problem or take full advantage of a promising trend. An example of prescriptive analytics
from our project portfolio: a multinational company was able to identify opportunities for repeat
purchases based on customer analytics and sales history.
Prescriptive analytics uses advanced tools and technologies, like machine learning, business
rules and algorithms, which makes it sophisticated to implement and manage. Besides, this state-
of-the-art type of data analytics requires not only historical internal data but also external
information due to the nature of algorithms it’s based on. That is why, before deciding to adopt
prescriptive analytics, ScienceSoft strongly recommends weighing the required efforts against an
expected added value.
Benefits of using marketing analytics in business

Marketing analytics provides businesses with insights and data-driven strategies to enhance
decision-making and optimize marketing efforts. Here are some key benefits, along with
examples:

1. Improved Decision-Making

Marketing analytics allows businesses to make data-driven decisions instead of relying on

intuition. By analyzing customer behavior, market trends, and campaign performance, companies
can allocate resources effectively.

Example: A retail company uses analytics to track customer purchasing patterns. Based on the
data, they decide to focus on promoting high-demand products during peak seasons, increasing
sales and profitability.

6
2. Enhanced Customer Segmentation and Targeting

Analytics helps identify distinct customer groups based on demographics, behavior, or

preferences. This allows businesses to tailor their campaigns for specific segments.

Example: Netflix uses viewing history and preferences to recommend shows and movies to
individual users, improving customer satisfaction and retention.

3. Increased ROI on Marketing Campaigns

By analyzing campaign performance, businesses can identify what works and what doesn't. This
enables them to refine their strategies and focus on high-performing channels.

Example: An e-commerce company uses A/B testing to determine which email design drives
more clicks. The winning design is then deployed across all future campaigns, boosting click-
through rates and revenue.

4. Anticipating Customer Needs

Predictive analytics allows businesses to anticipate customer needs and provide proactive
solutions, fostering loyalty.

Example: Amazon uses predictive analytics to recommend products customers are likely to
purchase based on their browsing and purchase history.

5. Competitive Advantage

Marketing analytics can reveal insights about competitors, helping businesses stay ahead in the
market.

Example: A fashion retailer monitors competitor pricing and promotional strategies through
social media analytics, allowing them to adjust their own pricing and promotions in real time.

6. Real-Time Performance Tracking

Businesses can monitor campaigns in real-time, making adjustments as needed to ensure optimal
performance.

Example: A food delivery app runs a digital ad campaign and monitors clicks and conversions
daily. They notice one ad performs poorly and immediately replace it with a more engaging
version, saving costs and improving results.

Conclusion

By leveraging marketing analytics, businesses gain actionable insights, improve efficiency, and
enhance customer relationships, ultimately driving growth and profitability.