Staying on top of ever more complex data

It is no news that businesses are being flooded with ever increasing amounts of data from multiple sources. The task of extracting, processing and investigating ever more complex data structures can cause difficulties for businesses, both in terms of speed of reporting and insight, but also how frequent they can get to the insight. Consequently, valuable data is often not used to its full potential.

This is where someone who understands the importance of simplicity and relevancy of data comes into action – to be able to manage that data and clean actionable insights from it. A lot of the work we do at Brightblue consists of gathering and merging data from various sources, cleaning it and then transforming it into an easily readable format for our clients.

This process in itself holds a lot of value for our clients. We find that simply feeding internal and external data in an easily digestible way back to our clients often leads to interesting discussions and insights. However, we also find that simply presenting charts and tables in the form of a PowerPoint deck can be limiting to this process. One chart often leads to a whole range of new questions, which are not easily answered during the meeting, as they require a further dive into the data.

This can cost valuable time or lead to some questions simply not being investigated at all.

Dashboards automate our services

This is why we are focusing on combining traditional presentations with dashboards as a new form of presentation. The combination allows us to follow a logical story whilst staying flexible enough to quickly drill down on unanticipated questions in front of our clients. Moreover, we can make the dashboards available to our clients for further interrogation after the initial presentation.

Another key advantage to the dashboard is that, once it has been put into place, it can be easily updated. Various sources of data are online and can be directly accessed through an Application Processing Interface (API) connection. On top of this, other sources can be updated semi-automatically from scheduled reports or File Transfer Protocol (FTP) connections.

The key benefit of this is that it allows for more frequent reporting of monthly or weekly data and modelling updates. It also means that there is a faster turnaround enabling us to get a precise read on activities days after they have happened rather than months which is often the case for traditional modelling.

The next big thing

Whilst this type of reporting is increasingly common practice, we at Brightblue are combining the reporting power of dashboards with the intellect of advanced predictive modelling and analytics. We not only offer real-time reporting but also real-time analytics. In order for this to work, we set up live dashboards that connect with our models which, in turn, link up to automated reports and API connections. This means that our clients can track how their key business metrics are moving but also it allows them to understand why in a faster, and frequent method.

What cycle does a TV brand campaign go through?

The television became a tool of communication in the 1950’s where it was the primary medium of influencing public opinion. But since then, it has changed significantly. The last ten years has seen it expand to Smart TVs and digital television where the only requirement necessary is a simple wifi connection. In fact, according to TV Licensing the amount of households with television licenses increases yearly with 95% of the British public already owning a licensed TV. Despite the new wave of technology, the TV still remains the most substantial form of marketing.

Campaign cycles convey descriptive results for FMCG businesses 

Each creative takes time to bed in, consumers become accustomed to the new campaign and begin to identify the creative with the brand. Afterwards, the creative enters a new stage called the peak. This is where it will have the most impact for the brand. But the peak eventually begins to decline into the wear out stage where the consumer is no longer interested in the new creative thus ultimately decreasing sales.

Which is why it is so important for FMCG businesses to know how long the creative will bed in to achieve the maximum impact. Some adverts such as the John Lewis Christmas Advert refresh their creative annually to limit such effects. However, brands such as Coke replay the same creative every christmas and rely on creative campaign cycles for results.

Brands need to know when a creative refresh is necessary, this issue lies with the consumer. It can take a while for consumers to recognise a creative and fully ingest it over time, once ingested the creative reaches its maximum impact. Eventually they become accustomed to the campaign and no longer react to it signalling that it is time for a refresh.

For businesses this depicts that the initial ROI from a new creative will inevitably be lower than future bursts once the campaign has had time to bed in. Should all things being equal increase the future bursts as well as the ROI will decrease. We have found that by working with FMCG businesses results vary depending on the product and platform.

Blockchain technology will change digital advertising

Blockchain technology is a digital decentralised ledger that records and safely stores transactions – think of a really secure database. Originally it was created to support Bitcoin where all transactions are recorded however, it has since found a new path in the digital advertising world. Essentially it is this technology that underpins cryptocurrencies which can be applied to ad transactions, thus allowing large amounts of data to be transmitted securely.

In fact, providing it becomes globally successful in the future, it will change the way marketers buy media online. This is because it makes purchases cheaper and much more transparent, all the while offering more security. Equally, this will also allow for a production of better quality data that leads to more accurate analysis on online media.

How can blockchain technology provide accurate data?

This new system is sure to improve online advertising in various ways. For example it reduces fraudulent advertising because it allows a shared access pool of data which improves ad targeting. It also offers users the opportunity to exchange their data for content access, offering an open window into the market. AdLeger will be the first blockchain consortium to focus on ad tech launches and although this is still in the early development stages the potential for such a tool proves enticing.

However, there are also some disadvantages to blockchain technology. As it is still in its infancy stage, the speed of transactions are slow and due to the instant nature of ad bidding it means that the technology still needs further improvements. Additionally, the concept of blockchain technology has yet to be accepted. However, Comcast, the world’s largest TV broadcasting company, is expected to go live with their blockchain platform in 2018. In fact, Mindshare – a global media agency – have also partnered up with Zilliqa which are a prominent blockchain platform in the Asia-Pacific. This means that companies specialising in this field may choose to expand should this platform prove successful.

Blockchain technology is especially valuable to Brightblue because it allows for more accurate analysis of ROI. It means we can see exactly what we are spending money on and where – an issue that many marketers will agree is time wasting. This could mean hitting all the right platform targets effectively and securing successful results with accurate feedback, enabling us to have better data for modelling.

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The importance of analytics during economic ambiguity

Brexit caused a whirlwind of economic confusion that shocked many when the results of the referendum were revealed on that warm summer’s morning of June 23rd 2016. It caused a shift in the British economy that solidified its uncertainty, and still we do not know what the outcome of the results will mean in the future. However, what we do know is that businesses are likely to suffer, which is why the need for analytics is crucial during a time of such ambiguity.

Consumers are spending less, because they have less

The GPB has devalued significantly leading to an increase in import costs and ultimately, an increase in price of consumer goods.

Chart: GBP vs the USD/EUR following Brexit

Inflation fired up to 3% this October, which is the highest it has been since 2012, unfortunately earnings only grew 2%. With the price on goods increasing and wages stagnating, living standards are suffering and this typically means consumers will get more price sensitive.

Chart: UK Inflation at its highest level for years

This particularly affects the FMCG and retail industry because people have less disposable income. High street retailers are also facing tough competition from online retailers such as Asos. Next and New Look were one of many fashion chains that were struck hard this year with a loss of £10.4m YTD Sep ‘17 compared to a profit of £59.3m during the same time frame of last year. This is likely to have alarm bells ringing for many brands with only six weeks to go before Christmas.

There is also the issue of the increasing rise of fuel and raw materials. In a bulletin from the Office of National Statistics, living costs have risen by 8.6% in comparison to 7.6% last year due to an increase in the price of food and airfares. Brands will have  to minimise the effects of rising prices by increasing prices where they are likely to lose less sales and support key price points on important footfall drivers.

Price elasticities provide rescuing results  

So how do we prevent businesses from taking heavy falls in the market? By measuring price elasticity in detail and on a frequent basis, you will know which product lines to increase price on (where the elasticity is lower), and which products to leave alone (where the elasticity is higher). This ensures that there is a minimal impact to the business in terms of lost sales, and can lead to increases in revenue and profit – despite the gloomy macro-economic situation.

At Brightblue we have launched a new automated predictive modelling product that can track and report price elasticity on a monthly basis. This can produce real time price optimisation results, which will ultimately save businesses significant amounts of money.

Clearly in unstable economic times there is even more need to understand what works and what doesn’t. By using data and sophisticated analytics, retailers are able to leverage this competitive advantage to help minimise losses and rise above the competition.

Mike Cross

When is evidence of marketing uplift not evidence?

These days we can access data at any time: clicks, website visits, likes, shares, search, live sales by minute, by second… but how do we make sense of this data? Why are uplifts in these metrics not the same as campaign success? As a marketer you must have heard the old adage that correlation does not mean causation. But what are the risks and implications of making big decisions based on these types of data and simple correlation?

When data moves in the same way it does not necessarily mean they are related to each other. Spurious correlations can be detrimental if not spotted – or if you like, is indeed spotted, but not recognised as such. Specifically the case where two metrics move in the same direction, but not because they are interacting, but rather because they are both caused by a third underlying factor or just happen to occur at the same time. For example, as ice creams sales increase the rate of drowning also increases which therefore must mean that the consumption of ice cream causes drowning – in fact, the true driver (the latent factor) is summer seasonality.

So how can we make sure that these faulty correlations are recognised for what they are?  Well, when assessing the success of activity there are a few factors we must consider like for example seasonality. What types of activities fuel other activities such as promotions, world events, social media, mail order and other forms of advertising? Are there activities promoting new product line launches or perhaps expanding on an existing product like creating a new flavour perhaps?

What are the results of misinterpreting data? Misallocating resources is a real possibility by using media platforms that simply do not work. Back to our swimming example: imagine trying to stop drownings by outlawing the sales of ice cream!

This is why econometrics is so powerful and at BrightBlue we take on a holistic approach to modeling because we know the pitfalls.

Ruan van de Venter

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