We know full well the business we’re in as marketers is really the business of choice. But recent discoveries from behavioural science are leading to a psychological revolution that challenges many of the accepted models of how communication, creativity and advertising influence a consumer’s preferences.
Many Australian businesses claim to be data driven but are in fact using information to support existing beliefs rather than achieve new and valuable consumer insights that provide a competitive advantage, a senior PricewaterhouseCooper partner claims.
The comments follow the release of PwC’s latest Entertainment and Media Outlook 2013-2017 report, which looks into the state of different media segments in Australia and their future growth and revenue potential.
According to the consulting group, Australia’s entertainment and media market will grow 13 per cent over the next five years to 2017 to total revenue of $35.7 billion. Consumer spending on entertainment and media products and services will also climb from $19.4bn to $22.6bn over the same timeframe.
When it comes to advertising spending, the group forecast online and mobile advertising to represent the highest growth sectors, increasing annually by 44 per cent and 25.7 per cent respectively to 2017. Interactive games, especially on mobile devices, will be a huge contributor, Pwc stated, with a compound annual growth rate of 3.4 per cent to reach $1.6bn by 2017.
The report also highlighted mobile Internet access as a major area of development and forecast revenues in this channel to grow 12.5 per cent year-on-year between 2013 and 2017.
Among the biggest statements made in the research is the criticality of data in staying competitive. PwC technology, infocoms, communications and entertainment lead, David Wiadrowski, said organisations must harness consumer data to develop new business models if they’re to meet the needs of the all-important individual and stay relevant.
PwC labelled consumer big data the “new rivers of gold” but claimed most organisations are still using access to data to support pre-existing theories rather than achieve fresh insights that could drive competitive advantage.
“Many Australian businesses already believe they are data-driven when in fact they are ‘data-after’ – using data to support preferred, tightly-held, existing beliefs,” he claimed. “Data after promotes a ‘do-nothing’ approach, which in a difficult environment is an excuse to do nothing.
“With data, where the sector needs to step up is in understanding how to structure and use the data to develop new, more agile business models.”
However, Wiadrowski recognised the complexity of the data issue was intensifying because “organisations now operate in a global market against global players, many of which like Google and Facebook have data in their genes”.
“With an overwhelming amount of unstructured data it will be easier said than done but the consolation is that the tools and techniques that can help, such as processing, bandwidth and storage, are getting cheaper,” he added.
Another key challenge in the quest to better utilise data is rising concern about appropriate usage. As previously reported in CMO, Australia’s new Privacy Laws will come into effect in March 2014 after being introduced and passed by parliament in 2012. Alongside the overarching legislative reforms are mandatory data breach notifications, which will require businesses to notify of any ‘serious data breaches’ or risk fines of up to $1.7 million.
The Association for Data-driven Marketing and Advertising (ADMA) has condemned the government’s plans for compulsory data breach notifications on top of the new privacy laws, claiming these are unclear and will place an unbearable administrative burden on hundreds of thousands of organisations.
Consumers are also concerned about privacy. According to a recent Ovum survey, most Internet users want an end to tracking personal data, while consumers surveyed for Infosys' new Engaging with Digital Consumers found Consumers want banks to use big data but cease from access their social profile.
The PwC Media and Entertainment Outlook 2013-2017 report will be available online from 3 July. Follow CMO on Twitter: @CMOAustralia, take part in the CMO Australia conversation on LinkedIn: CMO Australia, or join us on Facebook: https://www.facebook.com/CMOAustralia