The big data-driven business

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THE

BIGDATA￾DRIVEN

BUSINESS

HOW TO USE BIG DATA TO WIN CUSTOMERS,

BEAT COMPETITORS, AND BOOST PROFITS

RUSSELL GLASS • SEAN CALLAHAN

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Cover design: Wiley

Copyright  2015 by LinkedIn Corp. All rights reserved.

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Contents

Acknowledgments vii

Introduction: Why We Wrote This Book,

and How It Can Help You ix

1 Big Data, Big Benefits 1

2 The Evolution of the Customer-Focused,

Data-Driven Business 15

3 The Evolution of the Buyer’s Journey, or How the

Internet Killed the Three-Martini Lunch 25

4 The Marketing Stack—Why CMOs and CIOs Are

Working Together 35

The Software in the Stack 48

5 How Technology Bridges the Gap between

Marketing and Sales 55

Technology Brings Harmony between Sales and Marketing

at DocuSign 62

How Bizo Used Data to Boost Marketing–Sales Alignment 64

6 Data and the Rise of Online Advertising 69

Early Uses of Audience Data 72

Early Marketing Analytics—Audience Auditing 73

The Rise of Internet Advertising 74

Ad Networks 75

Audience Platforms 75

iii

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Online Advertising Exchanges 76

Retargeted Display Ads 77

Social Media Advertising’s Powerful Leap Forward 78

How Marketers Are Putting Data on Display 79

7 Using Data to Better Understand Customers

and Pursue Prospects 85

Netflix Flexes Its Data Muscle 88

SaaS and Its Powerful Window on the Customer 90

The Power of Predictive Lead Modeling 91

Data Isn’t Reserved for Dot-Coms 93

8 The Arrival of Left-Brained Leaders and the

Rise of the Marketing Department 97

9 Implementing a Big Data Plan (Sometimes by

Thinking Small) 113

Eleven Principles to Follow When Bringing Big Data into

Your Business 123

10 Measurement, Testing, and Attribution 133

Data and Measurement 136

Measuring the Power of Display Ads 138

Data and Testing 138

Data and Attribution 140

Attribution’s Big Day 144

11 Data Can Be a Matter of Corporate

Life and Death 149

The Dead 155

Near-Death Experience 161

Culture Clash 162

Missed Opportunity 165

Whistling Past the Graveyard? 166

Schadenfreude? 167

12 Using Data Responsibly 169

Privacy and Online Advertising 173

Privacy and the Corporate Database 176

The Responsibility of Corporations 179

iv Contents

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13 Big Data’s Big Future 183

How Cleversafe Harnessed the Power of Data 187

Key Trends Defining Big Data’s Future 188

The Human Touch Remains Essential 206

Index 209

Contents v

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Acknowledgments

Russ would like to thank his wife, Robin, and his three lovely

girls—Ava, Mackenzie, and Annika—for having the patience

to put up with him every day.

Sean would like to thank his wife, Nancy, and his daughters—

Sophie and Charlotte—for understanding the occasional weekends

and late nights that were devoted to writing this book. He would

also like to thank his mom and dad for reading to him as a boy and

giving him a lifelong love of stories.

Together, Russ and Sean want to thank all of the Bizonians and

our new colleagues at LinkedIn who helped with the creation of

this book.

They also thank all of the people who shared their insights with

them and who were indispensable in shaping the ideas contained

in this book.

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Introduction: Why We Wrote

This Book, and How

It Can Help You

We decided to write a book about big data and its impact on

businesses, after many years working in and around

companies and with executives who were seeing, increasingly,

how data could change the courses of their careers and the

trajectories of the businesses they worked for. We also saw

incredible big data stories starting to hit the public’s consciousness.

There was Moneyball (W.W. Norton, 2003), the book by Michael

Lewis about how Oakland Athletics general manager Billy Beane

gained a huge advantage through big data. More recently, there

was The Signal and the Noise (Penguin, 2012), Nate Silver’s book

exploring why so many predictions fail because of a lack of big

data—or because of a misinterpretation of it.

Despite its obvious power, the understanding and use of big data

have remained surprisingly sporadic in the business world. We see

three types of people:

1. The Pioneers, who are embracing the troves of data that they

have access to and who are truly transforming the way

businesses are run and how customer communication is

done.

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2. The Frozen, who either don’t know how to get started or don’t

seem to want to uncover the truths that data might deliver.

3. The Denialists, who don’t believe that big data has any value

to deliver and whose businesses are dead or dying.

The first group is far outnumbered by the latter two.

We realized that those people who are stuck can learn a great

deal from the Pioneers who have come before them. These Pio￾neers are not only breaking new ground but executing at a high

level, and all the while they are solving technological, organiza￾tional, and cultural issues to capture and use data to deliver

outsized returns on investment. These Pioneers are delivering

great experiences for their prospects and clients. They are giving

rise to greater truth and better decisions by making more data

available in boardrooms. And they are helping to create companies

that truly understand what their customer needs are now and will

be in the future.

The people and stories we highlight in this book are designed to

bring you insight into the first waves of a sea change in how business

is and will be done. Not only have they already brought huge upside

into their organizations, but they are also positioning their compa￾nies to be long-term leaders in a highly competitive world.

We hope you find the journey as interesting as we do and come

away with some insights on why and how big data is changing and

should change the way business functions—whether within tiny

start-ups or within the largest enterprises in the world. Our thesis

starts with a simple premise: the companies that most effectively use

big data to gain insight into their customers and act on that data will

win. Be data-driven and customer focused, and you will reap the

benefits.

We aim to show you how it’s being done, and how you can get

started. But first, let’s go back to when the earth was still thought to

be flat.

x Introduction: Why We Wrote This Book, and How It Can Help You

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CHAPTER 1

Big Data,

Big Benefits

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Data, information, facts—whatever term you want to use,

collecting and analyzing data have played a crucial part in

humankind’s ability to survive and to thrive since the dawn of

consciousness. The earliest humans shared with each other what

they knew of the world from their brains, those powerful catalog￾ers of data in their skulls: hunt now, not later; eat this, not that;

sleep here, not there.

Data is how we understand our world, and data has the

capability to take us far beyond the surface impressions that

our senses give us. Even though the world may appear flat to

the eye, the ancient Greeks determined that the earth was round. In

240 BC, Eratosthenes used the different angles of shadows in two

locations at high noon on the summer solstice to calculate the

planet’s circumference with remarkable accuracy—to within

1.6 percent.

Much of the mathematics, geometry, and other information

compiled and shared by the likes of Eratosthenes essentially

disappeared as the Dark Ages descended after the fall of Rome.

But with Johannes Gutenberg’s invention of the printing press in

1440—as statistician and writer Nate Silver points out in his book

The Signal and the Noise—the amount of information available to

societies again began to grow. Printed content enabled data to grow

exponentially.

With his mind soaking up an expanding ocean of data created by

these newly printed books, a sixteenth-century Roman Catholic

church administrator named Nicolaus Copernicus wrote his own

book, De Revolutionibus Orbium Coelestium, which used mathe￾matical calculations and observations—data—to prove the idea

that the earth revolved around the sun. This notion wasn’t widely

accepted in a time ruled by the Catholic Church, which was

vigorously opposed to the idea that heaven was mutable and

that the earth wasn’t the center of it. Copernicus didn’t allow

his book to be published while he was alive, fearing a backlash

from the Church he served. Despite the Church’s longtime oppo￾sition, the data—and the truth—were eventually published.

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