Chapter Eight Operational Data Tools Chapter Eight Learning

Chapter Eight Operational Data Tools

Chapter Eight Learning Objectives • To learn database basics and how databases benefit Internet marketing • To understand how data warehouses and data mining are operational data tools • To describe privacy-sensitive techniques used to develop consumer profiles • To recognize the importance of the marketing intelligence process and how it is conducted online Copyright © Houghton Mifflin Company. All rights reserved.

Operational Data Tools and Databases Operational data tools - computer-based techniques used to learn about • Own operations, web site, Internet activities • Competitor's online activities • Environment • Customers - current, past, potential Copyright © Houghton Mifflin Company. All rights reserved.

Operational Data Tools and Databases (cont’d) • Privacy advocates are incensed that • Marketers collect masses of data • Without consumer knowledge or consent • Do not give consumers opportunity to edit own data • New data tools used surreptitiously • Collecting broader, more sensitive data Copyright © Houghton Mifflin Company. All rights reserved.

Operational Data Tools and Databases (cont’d) Should the Internet be … • Opt-in – No data collected without subject’s approval – Ask before collect • Opt-out – Must ask to be excluded from data collection – Cease collecting only on request Copyright © Houghton Mifflin Company. All rights reserved.

Operational Data Tools and Databases (cont’d) • Databases - collection of data structured for computer retrieval • Data - sets of text, numbers, other elements input into a database • Marketing data – Demographic, transaction, lifestyle, behavioral, technical Copyright © Houghton Mifflin Company. All rights reserved.

Operational Data Tools and Databases (cont’d) • Database - electronic file cabinet, process to retrieve data • Database construction - involves information technology and marketing • Relational databases - data stored in linked tables • In-house databases – Own data • Compiled databases – Purchased from other sources Copyright © Houghton Mifflin Company. All rights reserved.

Data Warehousing and Mining • Data warehouse - electronic storage, extraction and management system • Data mining - machine learning, knowledge discovery – Machine-driven methods – Looking for hidden patterns, relationships in databases and warehouses – Can answer “what if? ” marketing questions Copyright © Houghton Mifflin Company. All rights reserved.

Collect and Apply • Privacy-sensitive tools • Cookies - small data files placed on user’s computer by web site’s server • Bugs (beacons) - gif images placed by thirdparty media and research companies – Allow multi-party tracking • Server log files • Web analytics - software and people analyze collected data Copyright © Houghton Mifflin Company. All rights reserved.

Collect and Apply (cont’d) • e. CRM • Electronic customer relationship management • Broad strategy for applying data-derived knowledge to develop more effective marketing tactics • Widely promoted; less widely adopted • Costly, complex, often disappointing • Dynamic web pages provide personalized content Copyright © Houghton Mifflin Company. All rights reserved.

Marketing Intelligence • Process - system for collecting and transforming data • Content - knowledge for marketing decision making • Not espionage! • Legal, ethical collection of public data • Focused in-house, externally, both • Requires timely, relevant, accurate data Copyright © Houghton Mifflin Company. All rights reserved.

Figure 8 -1: Marketing Intelligence Process Copyright © Houghton Mifflin Company. All rights reserved.