What Are Pros and Cons of Big Data in Marketing?

Nowadays, people constantly produce a lot of data every day, and all those data could be collected for different uses. Big data is something people never experience before and it becomes one of the most important tools for business and marketing. Companies create databases to collect data from customers through media and sales channels, it helps marketers to have a better understanding of their company, product and consumers. However, Big data also have some drawback all advertisers need to pay attention to. Today I will discuss the pros and cons of big data in marketing.

What is Big Data?

According to IBM, big data is defined as data sets whose size or type is beyond the ability of traditional relational databases to capture, manage and process the data with low latency. There are over one billion documents uploaded to the internet and occupied over 2.5 quintillion bytes of storage space in servers every day. To process big data, people work with cloud servers and complicated algorithms to analyze tons of data to get the desired result.

Advantages of Big Data in Marketing

• Connection with customers: database marketing allows marketers to collect and store the required information directly from target customers. Because the marketers have contact information about their customers in the database, there is a feedback loop to a database, and information on individual customers is obtained.

Image by Ronald G. Drozdenko

• Fostering customer loyalty: Big data analytics could help marketers to have direct customers’ behavior and preference information. Therefore, companies could execute effective marketing campaigns to different customers to generate greater loyalty.

Disadvantages of Big Data in Marketing

• Data quality: A database contained tons of information about customers, products and finance. Data analysts need to update the database in certain periods to maintain the data accuracy for analysis. On the other hand, data is required to be tested before use to ensure the quality of analyzing reports. All those steps are time-consuming and money-consuming.
• Security risks: A database stored tons of valuable information about customers and it could be a target for hackers. To protect the database, companies need to have a malware protection system, encryption system and backup files to ensure the safety of the database.
• Costs: Big data system requires companies to invest in hardware, software and technical specialists. It’s an expensive project to have an IT department to maintain and operate big data system.

My Thoughts

In my opinion, big data is a powerful tool for marketing. Even though it helps marketers to build a direct connection between the company and consumers, big data platform operation is pricy and time-consuming. Companies need to examine their financial situation and capability of the IT department before making decisions of using big data in marketing.