Global Issues in Predictive Marketing Analytics

Published by RoadMap Technologies on May 21, 2012May 21, 2012

Predictive Marketing Analysis has proven to be a key competitive advantage for American marketing companies.  Who hasn’t wondered how Amazon.com or Netflix can come up with plausible recommendations for that next book to purchase or that next film to stream down to your gaming device?  Outside the U.S., it’s a different story as some of the most sophisticated marketing analytical techniques must be adapted to each country’s unique combination of technology infrastructure, privacy laws, marketing regulations and competition.

Predictive Analytics in the European Union

The privacy laws in the EU are much stricter than in America.  In America, credit card companies, E-Commerce sites, credit reporting agencies can build a comprehensive portrait of an individual, family or neighborhood.  Each European country has a different Data Protection Authority which governs what information can be kept on each customer, so that an analysis that could make your company $1 million in profit in the U.S. could easily cost your company the same amount in fines to the government.  Fortunately, by aggregating transaction level data, you depersonalize it.  There’s no need to aggregate over time, so that you can still conduct promotion response analysis – you just can’t calculate promotion response curves by individual.

Predictive Analytics in Asia

In the emerging economies of Asia, marketing infrastructure is still evolving, as digital TV and Internet connectivity continue to rise.  Traditional retailers are still protected from competition from large stores in economies such as Japan.  Last of all, the greater concentration of the population in large cities means that traditional marketing strategies such as outdoor advertising retain their effectiveness to a much greater degree than in North America. So, there’s no reason to believe that the optimal marketing mix in an Asian country will look anything like the best strategy in the U.S.

Cultural Barriers to Adoption of Predictive Marketing Analytics

America is still a very young country relative to Europe and Asia.  American culture is a blend of many different cultures, which is generally bodes well for marketing American products internationally.  But, when it comes down to marketing analytics, brand and product managers in other countries often demand to “start from scratch” with their own view of the consumer and competition and then build a predictive model from that point.  Trying to force-fit a predictive model, regardless of how well it has worked in the U.S. is a recipe for a disastrous implementation of a marketing program.

Summary

Predictive analytics has transformed American marketing.  It has yet to have a global impact due to many regulatory and cultural factors.  However, companies who can successfully export their analytic strategies around the world can reap the benefits of profit-maximizing marketing strategies With all the differences between US and international markets, the base case U.S. marketing mix can be very different than the optimal nternational marketing mix in country after country.