Big Data’s Big Mistake: Quantity over Quality

by   |   October 21, 2014 5:30 am   |   0 Comments

Malcolm Stewart, CEO, YouEye

Malcolm Stewart, CEO, YouEye

Back in the “Golden Age” of advertising, instinct, creativity, and understanding of human nature drove the industry. Talented writers and artists paced in gleaming skyscraper offices, brainstorming ideas that would shape the nation’s perception of brands and products. This era has attracted a lot of attention over the past couple of years, thanks largely to the popularity of the television drama “Mad Men.” The show reminds us that 50 years ago, no real boundaries existed between advertising and marketing, and creativity directed the process.

Unfortunately, that era is over. Quantitative data has taken the place of qualitative data, and today marketing is considered more of a science than an art. But marketers who focus only on quantitative data risk missing the full view of customers.

Qualitative versus Quantitative Data

Quantitative data focuses primarily on actions. Analytics tools track customer activity like clicks, bounce rate, and time spent on site, and generate reports based on the findings. Quantitative data can tell you what people are doing. Qualitative data, in contrast, explains why. Qualitative data analysis helps brands understand how customers decide to buy products or choose one brand over another. It uncovers the behaviors and motivations behind customers’ actions.

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Quantitative data can tell you, for example, that 60 percent of your customers are lost during checkout. However, it can’t tell you the reason for that. This is where qualitative data comes in. Qualitative data could reveal that those customers did not advance in the purchasing process because there were no three-dimensional product views, reviews were unappealing, or the product offerings were bundled ineffectively. Quantitative data is great for identifying fires or chokepoints in the online experience, while qualitative data provides actionable insights on how to eliminate them.

To truly optimize the user experience and maximize conversion rates, marketers must use both types of data together. But in today’s data-obsessed world, most marketers rely primarily on quantitative big data, which begs the questions: why is this happening, and is it a big mistake?

The Rise of Big Data

Quantitative data simply did not exist in the time of “Mad Men” the way it does in the digital age. Marketers and advertisers had to depend on qualitative research, which they gathered by speaking directly to their target market. Now, thanks to the proliferation of personal computers, smartphones, and wearables, we generate 2.5 quintillion bytes of data a day. That means every two days, human beings create more data than they did from the dawn of civilization up until 2003.

The big data revolution has transformed the ways businesses operate, and in many ways for good. The deluge of quantitative data enables companies to personalize and retarget ads with an accuracy and on a scale that was just not possible before. It also enables them to identify patterns and problem spots in real time and respond accordingly. For example, if data shows that a click-through rate for a specific link is lower than expected, companies can make it more visually prominent or give it a different style. The value of big data is clear, and the market is mushrooming accordingly. The worldwide market for big data related hardware, software, and professional services is projected to reach $30 billion in 2014, and is growing 6 times faster than the rest of IT.

The downside of this data obsession is that companies end up optimizing for where people click, instead of their actual experience. This is what happened to after they re-launched their website without proper qualitative testing. They optimized feature sets using big data as well as small, statistically invalid focus groups. As a result, 7 million people stopped using their site within a month, and the company is still recovering from the negative impact.

NBC isn’t the only company to make this mistake. Many marketers, e-commerce leaders, and product managers seem to have forgotten the power of qualitative data. When big data controls marketing strategy, companies risk treating their customers like numbers. Right now, marketers all over the globe are so wrapped up in numbers that they are neglecting the human side of data – the “why” behind the figures – and missing valuable insights as a result.

Another problem is that big data is eventually destined to plateau – and may be there already. Take, for example, “standard” conversion rates. The fact that we even have a standard rate of anything reflects that marketers have begun to think alike and campaigns to look alike, rarely moving the needle beyond what the numbers will tell them. Just because you can incorporate trillions of data points doesn’t mean you should. Your customers aren’t spreadsheets, and it is very easy to get overwhelmed and bogged down by too much data.

It is time to enact a different approach to creating and marketing new products and positioning strategies.

A Holistic Picture

Quantitative research is essential for product and marketing strategies, but qualitative research is the missing link to get the whole picture. For example, qualitative data analysis can determine the direction of your A/B tests before you decide to put resources into them. Because the subject of quantitative testing is often based on instinct, the starting point for A/B tests can be ill-informed, even with the best intention to be “scientific.” So using qualitative analysis to inform where to conduct quantitative research is important.

At YouEye, we recently worked with a large e-commerce retailer to help it discover why it was seeing a 70 percent shopping cart abandonment rate, even after a successful website revamp. The company’s quantitative tools allowed it to test the various factors of the checkout process to see what made a difference, yet the company still didn’t have solid answers. Qualitative data sets and analysis identified the reason: the discount code process. As part of the checkout process, the site asked customers who were already willing to enter payment information if they had a discount code. This caused customers to pause, think about whether they were getting the best deal, and search for a discount code on the web. Most never returned to complete their purchase.

Investing in big data alone is not going to take your brand to the top. A layered approach to bringing quantitative and qualitative data together is well worth the effort for any product or marketing initiative you have planned. Marketers need to remember that real customer insights based in qualitative information are necessary for turning quantitative data into informed actions. They should use qualitative insights to direct the questions of any quantitative study, and use qualitative data to understand the “why” behind the numbers. Marketers also should move beyond the inch-by-inch growth and optimization we’re used to seeing with pure quantitative-based actions. You might be surprised to see the significant returns that come from looking into customer experiences from a qualitative standpoint.

Don’t make the mistake of getting too wrapped up in big data. The real stories lie in the holistic set of data that’s available no matter what type of campaign you are running or product you are developing.

Malcolm Stewart is the Chief Executive Officer of YouEye, Inc. For  more than 20 years, he has propelled growth for prominent technology firms as a senior executive, board member, and investor. Prior to joining YouEye, Stewart served as VP of Strategy at Avaya, Director of Strategic Planning at Microsoft, and VP of Corporate Development at Verio.

Malcolm earned a Juris Doctor from Boston College and a Bachelors of Science in Computer Science from the University of Southern California.

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