Ujwal Kayande

Analytics evangelist and Melbourne Business School marketing professor, Ujwal Kayande, shares his view on the state of analytics in marketing and why big data doesn’t replace old ways of thinking about data

The emphasis on data analytics to explain marketing’s ROI could be stifling innovation and the CMO’s role as business growth strategist, an Australian analytics evangelist claims.

Ujwal Kayande PHd is a professor of marketing at Melbourne Business School (MBS), and noted authority on the subject. He started teaching ‘marketing science’ and ‘marketing engineering’ in the 1990s, when the emphasis was on creativity rather than numbers. Since then, Kayande has taught analytics and marketing strategy at business schools globally including the Wharton School, Penn State, Mannheim and ESSEC. He has also advised on analytics practices for leading brands including Coca-Cola, Merck, IBM, DuPont and Vision Australia.

Earlier this year, Kayande became the director of MBS’s Centre for Business Analytics. The centre is sponsored by several bluechip organisations including SAS, Telstra, Deloitte, AT Kearney, Suncorp, Wipro and Woolworths, and offers a one-year Master degree aimed at fostering the next generation of business savvy analytics gurus.

“To be successful today in marketing analytics, you need to be ‘trilingual’ – you have to be able to speak technology, maths and business problems, which is the goal at the end of the day,” Kayande told CMO.

“If I look at what’s really changed in the last 20 years, it’s the technology part. Maths hasn’t changed, nor really has business – there were business problems then and there are problems today. We collected data in different ways then too, but technology has enabled a very different type of data to be collected in real-time, and solutions to be offered in real-time.”

The problem is most of us like anything that’s new, so we’ve have latched on to big data as the latest be all, end all of data analytics – to our detriment, Kayande claimed.

“Focusing on the size of the data, new technology or new hammer being applied to the data is the wrong focus,” he said. “The focus has to always be on the problem being solved. It doesn’t mean organisations are doing it, however.”

Kayande will be speaking on the rise of marketing analytics and the pitfalls it can also present CMOs at the World Marketing and Sales Forum Melbourne in November.

Taking analytics beyond ROI

One major concern for Kayande is today’s emphasis on analytics to calculate the ROI and impact of every marketing activity being undertaken.

“The problem is that it then forces the CMO and their team to start doing things on which you can measure the ROI, and which you can attribute clearly to your activities to,” Kayande said. “As a result, innovation starts becoming stifled.

“Real innovation, by definition, is difficult to calibrate the return on. And that’s where you start getting into some trouble, because it can lead you to a static position in the market, which can hurt you in the long run. It can make you far more short-term than long-term focused.”

Unless marketers use analytics to fuel innovation, and are willing to take a risk on ideas about what new products can be offered, or the market reach and opportunities available to them through new ventures, they won’t achieve the business leadership position they deserve, Kayande said.

“Marketers should be able to guide where demand comes from in future,” he claimed. “They should be able to map out the growth strategy of the firm, which is far bigger than working out the ROI of a particular digital channel.

“Growth strategy means thinking about which new markets to enter, and what risks are associated with it. It’s a very different conversation, but it’s one that should be led by CMOs, not this focus on being a reporting mechanism.”

To counterbalance the emphasis on short-term metrics, Kayande advised marketers to start thinking about a proportion of their activities that must be measured clearly on an ROI basis, then setting aside another portion that can be dedicated to more innovative activities.

“That comes down to senior leadership, but it’s what allows the CMO to be innovative and to explore new markets, products and ideas,” he said.