1. Operational Data Tools Chapter Eight

2. Copyright © Houghton Mifflin Company. All rights reserved.8–28–2 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

3. Copyright © Houghton Mifflin Company. All rights reserved.8–38–3 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

4. Copyright © Houghton Mifflin Company. All rights reserved.8–48–4 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

5. Copyright © Houghton Mifflin Company. All rights reserved.8–58–5 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

6. Copyright © Houghton Mifflin Company. All rights reserved.8–68–6 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

7. Copyright © Houghton Mifflin Company. All rights reserved.8–78–7 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

8. Copyright © Houghton Mifflin Company. All rights reserved.8–88–8 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

9. Copyright © Houghton Mifflin Company. All rights reserved.8–98–9 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 third- party media and research companies –Allow multi-party tracking Server log files Web analytics - software and people analyze collected data

10. Copyright © Houghton Mifflin Company. All rights reserved.8–10 Collect and Apply (cont’d) eCRM 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

11. Copyright © Houghton Mifflin Company. All rights reserved.8–11 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

12. Copyright © Houghton Mifflin Company. All rights reserved.8–12 Figure 8-1: Marketing Intelligence Process