Data: the New Oil, or the New Data?

By Dom Murray On September 3 2019 Big Data With 0 Comments Permalink

Data: the New Oil, or the New Data?

Data is the new oil. Almost everyone involved in marketing will be familiar with this quote. Credited to Clive Humby in 2006, comparisons between data and oil have grown steadily ever since. Now, more than a decade later, the quote seems self-explanatory. In terms of sheer value, of course data is the new oil.

While the analogy may not match perfectly, by most metrics, the ‘data’ industry is now larger and more lucrative than the oil industry.

As such, we look at three key reasons why data is the new oil, examining how you can harness the power of data to enhance your email campaigns.

Data Has Surpassed Oil

Ironically, according to the data, data has clearly surpassed oil. Of the top 100 global companies by market capitalisation, technology companies are 244% more valuable than oil & gas companies ($5,691 billion vs $1,650 billion)^[1]. Further, 5 technology companies make up the top ten global companies by market capitalisation, while 6 of the world’s ten most valuable brands are tech companies^[2]. By these metrics, data appears to have surpassed oil.

However, data’s dominance extends beyond monetary value. While data and oil are both highly valuable commodities, more accurately, they are both highly valuable commodities that need to be refined. Data by itself is largely meaningless. This is where data analytics become invaluable. Between 2015 and 2018, ‘big data adoption’ increased from 17% to 59%, equivalent to a Compound Annual Growth Rate (CAGR) of 36%^[3].

Additionally, global market revenues for ‘big data’ are projected to rise from $42 billion in 2018 to $103 billion in 2027^[3]. Perhaps most importantly, 79% of executives say that companies that fail to embrace big data will lose a competitive edge and even “face extinction”^[4].

Evidently, data is almost essential for success in 2019, making it an indispensable commodity among the world’s leading companies.

More Data Than Stars

It’s little wonder that data is so valuable, given the sheer volume of data we collectively produce. According to some estimates, there will be 40 times more bytes of data than stars in the universe by 2020^[5].

To put it another way, terms like gigabyte and terabyte may soon be obsolete, as the ‘digital universe’ is expected to reach 44 zettabytes by 2020^[5]. Or, in other words, by 2020, every person on earth will create 1.7 megabytes of data per second. Daily, we collectively send 500 million tweets, 294 billion emails, 65 billion WhatsApp messages, and create 4 petabytes of data on Facebook^[5]. Put simply, the amount of data created daily is mind-blowing.

Still, it’s one thing to have a lot of data, but it’s another thing to harness this data to your advantage. In an email marketing context, the median number of data sources has increased from 10 in 2017 to 15 in 2019^[6]. According to a survey by Dresner Advisory Services, 65% of respondents in the ‘Advertising/Marketing’ industry said that big data was ‘critical’ to their business, while 77% said they use big data in their business^[7].

When it comes to data, it seems quality and quantity go hand in hand.

The Power of Data for Email Marketing

With data becoming such a prized commodity, the question for email marketers becomes: how can I transform data into results? According to an analysis by Expert Sender, data science can help marketers both engage and retain customers by providing insights into things like customers’ purchase frequency, thereby allowing marketers to send better-targeted product recommendation emails^[8].

Interestingly, users are also becoming more savvy about how companies use their personal data, with 63% of Millennial and Gen Z respondents in a recent survey saying they understand how companies use their data^[9]. This creates a win-win situation: customers receive more personalised experiences, while companies build trust and gain valuable data.

Concerns regarding data privacy may also increase the effectiveness of email marketing. With many email databases shrinking to comply with GDPR laws, marketers should be left with a more engaged database, which should translate to higher engagement rates^[8].

The continued growth of AI should also help marketers make better use of data, by advancing techniques like personalisation, segmentation, and interactivity. In fact, 59% of executives say their company’s ‘big data’ endeavours would be improved by AI, while 75% of Millennial and Gen Z respondents say ‘they can see the good’ that comes from sharing their data to facilitate AI-driven personalisation^[9].

Consequently, in a digital landscape where there is more data than ever and users are more willing to share their data in exchange for personalised, high-quality experiences, opportunities are nearly limitless for skilled email marketers. This is already having a notable impact, as 67% of email marketers say they plan to use data to “better personalise email content”, while 66% already personalise emails based on age data^[10].

However, perhaps the most revealing statistic to demonstrate the power of data is that, in a recent study by McKinsey Analytics, nearly 50% of respondents said ‘big data’ had “fundamentally changed” both their business practices and their approach to sales and marketing^[4].

Data was the new oil. Now, data is the new data. In 2019, nothing else seems to compare.