A Framework for Advertising Agencies to Approach Big Data

This column series will conclude for now with this final installment. In this last column, we will explore the potential of big data business for advertising agencies and introduce the necessary perspectives needed to leverage big data effectively.

The Potential of Data Circulation Markets

In the future, enabling third parties to utilize various data owned by companies and organizations will allow for the advancement of "products" and "sales methods" that companies could not previously create. Similar to the advancement of "sales methods" as a marketing strategy, which we have introduced in previous columns, the advancement of companies' "products" is an innovation brought about by big data.

For example, "Insurance Company A" utilizes driving logs from specific vehicles provided by "Automaker B" to offer a rational insurance product—an advanced "product"—where premiums are calculated based on actual driving behavior.

In this "data circulation market" formed by data flow between companies and departments, advertising agencies can establish a unique and advantageous position. By leveraging existing expertise, they can interpret data owned by one company or department, hypothesize valuable applications for third-party companies or departments, and produce these matches.

The Ecosystem of Insurance Companies, Automobile Manufacturers, and Users

 

How Advertising Agencies Can Harness Big Data

The key to establishing the above ecosystem lies in obtaining permission for data provision from the "service beneficiary" when transferring data from the automaker to the insurance company. Given consumers' heightened awareness regarding personal information, data circulation between businesses is likely only permissible when users receive services exceeding their expectations in exchange for providing their data. I believe this perspective is precisely what advertising agencies need to harness big data effectively.

The buzzword "big data" has gained widespread acceptance. Against a backdrop of increased data generation opportunities and reduced costs for data storage and processing, discussions across various industries have centered on how to leverage data characterized by "high resolution," "high frequency," and "diversity" for business purposes, yielding numerous success stories. However, behind this, there have also been cases where significant social issues arose, particularly from a privacy perspective.

Amidst this, previous articles have introduced concrete ways for advertising agencies to harness big data and generate added value for their business. Abstracting these activities, I believe the framework for advertising agencies engaging with big data is as follows.

The "(Big) Data" that accumulates when the world's "events" are "converted" into data is not itself a product to be sold. By adding "interpretation" to make that "data" useful, it is elevated to "information." Using that "information," hypotheses are formed to "enhance" the client's "products" and "sales methods." Only when a business model is designed—showing how the client monetizes through these enhanced "sales methods" and "products"—does big data become valuable to the client. And only when we can support that level of design does big data truly become a business for advertising agencies.

Big Data Utilization Framework

In the case study mentioned, for example: What kind of "interpretation" should be applied to signal data generated by sensors? How can the purchasing experience (method of selling) provided to consumers using "information" be "enhanced" as we move from O2O to OAO and further to omnichannel? Amid accelerating convergence of IT and marketing, how can we collaborate with IT vendors to map out the "business model" for customers across the entire value chain? Advertising agencies can offer significant added value. If this functions effectively as a framework, big data can become an ally for advertising agencies.

Furthermore, rather than being confined solely to advertising agencies, I believe this framework can generate greater value for customers when it involves collaboration across industry, sector, and company size—from IT vendors to research firms, startups, and even customers of other entities—to support clients collectively, as I mentioned earlier. Above all, I personally feel that the opportunity to meet diverse individuals across industries and roles has been the greatest asset I've gained from big data.

Moving forward, I will continue to share insights through platforms like this, seeking further encounters and discussions with diverse individuals. I look forward to your continued engagement. Thank you very much for your time and attention.