Is data a cost or revenue driver?

6 ways data operates as a marketing channel

As NRF NXT approaches, we’re talking to leaders in digital marketing, analytics and customer experience who are sharing case studies and presenting tactical deep dives at the event. Vic Drabicky is the founder and CEO of January Digital, an award-winning, data-led full funnel digital marketing agency and in-house consultancy for leading consumer brands including David’s Bridal, Kendra Scott and Peapod. 


Headshot of Vic Drabicky, January Digital
Vic Drabicky, CEO and founder of January Digital is speaking at NRF NXT: Retail's Digital Deep Dive, July 22-24 in Las Vegas.

One of the best things about running an agency is the visibility we have into many different businesses. We get to see how they are structured, how they view product and brand, and, perhaps most interestingly, we get to see how their profit and loss statement is structured.

Seeing a business’s P&L is incredibly telling. It reveals what the business thinks is important, what’s growing, what’s driving revenue and what’s a “cost center.” When looking through a P&L, we always look at the major pieces, but then we quickly look to see how data is classified: Is it an ecommerce investment like an ecommerce platform? Is it a cost center like HR? Is it an asset tied to revenue? Is it labeled “data tech” or something more specific?

In the ideal situation, we see customer data handled like an asset and the technology used to activate that data handled like a marketing channel — meaning a revenue stream.

Seeing data activation as a marketing channel might seem silly, but here are six ways data is operating more as a marketing channel than a central cost, cost center or other classification:

  1. You are buying something. In media, you spend dollars for ad placements. With data, you spend dollars for ad placements that are much more effective than those you bought without data.
  2. Data drives revenue. At its core, data drives revenue with both existing and potential customers, much like marketing channels do. It is easily tested, measurable and offers a clear business impact — all things a business would expect from its marketing channels.
  3. There is a measurable ROI. Not unlike marketing channels, an investment in data is not only measurable — you could argue it’s significantly more measurable than some marketing: influencers, billboards and even fashion shows, for example.
  4. It directly affects retention and acquisition. Just like a marketing channel, data use has an enormous impact on a business’s ability to retain, acquire, reengage or even upsell customers.
  5. You get what you put into it. A poorly run Google Ads campaign gets lackluster results, while an amazing agency/performance media manager often sees incredible results. The same goes for data: One person, part-time, with the generic “data person” label, isn’t going to produce much. But right person, integrated with teams and used to influence decision making, can bring spectacular results.
  6. You turn it off, you notice it. When a business turns off a marketing channel, it typically notices it right away. Data is the same: If you stop using data to power your social, search, email, direct mail or other channel, your business would notice immediately.

One way we have applied data as a marketing channel approach is in how we evaluate channels: Instead of having brand search campaigns, try dividing it into data-driven brand search and non-data-driven brand search (then you can do this with subsequent campaigns all the way down to TV advertising). This sets up a matrix that allows you to evaluate the ROI on your data application/investment.

Once you have an ROI on the data, you can begin looking at investments in data collection, processing, application and so forth, seeing if you should spend more or less. Through this process, the conversation slowly changes from the cost of data to the revenue or brand impact driven by data. When you are talking revenues and brand impact, you have a marketing channel; as a side benefit, a business might actually be able to spend less on marketing because the investment in data has provided better results or a clearer picture of what’s working and what isn’t.

This sort of approach might feel awkward. However, when a business can adjust its view of data investments (from finance all the way to marketing), it’s better equipped for success … and has a much more interesting P&L for me to review too.

Vic Drabicky is the founder and CEO of January Digital. Hear more from Drabicky during his case study presentation at NRF NXT: Retail's Digital Deep Dive, July 22-24 in Las Vegas. 

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