Everything we watch and everything we do is now atomised into binary code and smaller and smaller pixels. Televisions, phones and laptops today are available in resolutions unimaginable ten years ago.
The high-resolution world that we are experiencing on devices is actually two-way. In the fields of marketing and data, businesses are developing an ever-better understanding of consumer behaviour. Devices and applications that understand our movements, interests and our behaviours enable marketeers to engage anonymised consumers and their interests at a level of detail that was once unimaginable.
Rules and regulations tightly govern the detail that marketeers are permitted to see, but enhanced data is a godsend not only to business but also to consumers through the enablement of better targeting, addressing them in ways that resonate more, at the right moment and in the right way, to a level that is almost the anticipation of needs. Better data, appropriately used, is beneficial and useful to all, businesses and consumers alike.
In fact, data is now so useful that it is arguably one of the most valuable assets that a business owns. According to a recent poll that Data Practitioners conducted, marketing and marketing data are now a board-level responsibility in more than two-thirds of firms.
How things change. Not so long ago, data analysis in marketing departments depended on a blurry wide-angle lens. ACORN analysis would render probabilities based on income, age and location. How primitive that data now looks, especially in the context of wider consumer choice. Under many food brands, for instance – from Coke to Hellmann’s to Cadbury’s to Spam - there is a now a blinding array of choices to meet the disparate and subtly differentiated needs of people who might live next door to each other, or even under the same roof. Whatever the merits and practical consequences of data regulations, the unstoppable truth is that we have access to more information about ourselves and others than ever before - and because of this we can make increasingly accurate predictions about current needs and future behaviour.
Today we experience the world as a series of complex overlapping tribes and consumers are emboldened and enabled to assert their distinctions. Thanks to the connected world we live in and the technologies we permit to track our choices, data is collected and shared in many ways. Based on the anonymised information that is gathered primarily through online sources, marketeers understand us at a much more human level than something simply based on income, post code or household composition. Proximities are no longer just about the garden fence. Our interests and attitudinal proximities now result in marketing messages brought to us in ways that resonate with us as complex and nuanced individuals.
The insight and targeting capabilities that the data provides is extraordinarily valuable. The most successful businesses of the future will be the ones that most effectively utilise, enhance, segment and time their understanding of their customers. They will also be the most valuable businesses.
The value of well-maintained and enhanced data, in our view, ought now to be properly recognised on the balance sheet. Arguably, it ought to take the place of ‘goodwill’, which was always an imprecise and emotive estimate of the difference, in enterprise valuation terms, between perception and reality.
If goodwill is an intangible measure of brand loyalty and lacks rigour, on the other hand, data maps behaviour and predicts actions. Shift your focus from one to the other and you move from the measure of something that is passive and amorphous to something active and precise. Data has enormous and near-immediate utility.
Add to that a world in which every business model seeks to aid customer promiscuity, and you create a climate in which goodwill feels flimsy. A combination of powerful technology, efficient payment and liberalising regulatory tendencies that favour the consumer are robbing businesses of any sense of security when it comes to the customer. It is now much easier to switch banks, change utility provider, abandon brand loyalty in favour of a price reduction from a competitor, and more.
We see two commercial imperatives in this data-rich world: better management, organisation, enhancement and deployment of the data that a business holds - and a corporate mindset that sees the developing data set as arguably one of the most crucial and valuable assets on the balance sheet.
In our view, it is time for the analyst community to look more closely at valuation methodologies and to value data more highly than goodwill. In a commercial climate in which competitive advantage is often measured in milliseconds, goodwill increasingly looks like a measure of commercial nostalgia. It is also time that businesses applied more care to the management and application of this asset. Knowledge is power, and in commercial life, time, like never before, is of the essence.