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Data-Driven Marketing Accounts for $156 Billion of the U.S. Economy
Big data-related marketing jobs number 675,000.
Posted Oct 15, 2013
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CHICAGO—The data-driven marketing economy contributed $156 billion to the U.S. economy in 2012, according to an economic impact study commissioned by the Direct Marketing Association (DMA). Fifty-two billion dollars of that figure came from activity in the prospect/customer relationship marketing section, including list management, email production and delivery, and telephones sales. The data-driven marketing economy also fueled 675,000 jobs.

According to DMA's think tank, the Data-Driven Marketing Institute, "The Value of Data: Consequences for Insight, Innovation, and Efficiency in the U.S. Economy" is the first study to quantify the impact of the sector. During a press conference here today, DMA president Linda Wooley explained that the study was commissioned partly as a response to the increasing scrutiny the industry has received from policymakers. "We felt as if our industry was under siege," she stated. The House, Senate, and Federal Trade Commission are among the organizations that have recently opened investigations into the operations of data brokers.

Professor John Deighton of Harvard Business School and Professor Peter Johnson of Columbia University discussed the findings of their study during a meeting this morning at DMA's annual summit. After initially looking at over 3,000 companies, they narrowed their focus to 650 companies that provide Big Data–geared services. "We look at the people who help marketers reach consumers," Deighton summed up. After winnowing their focus, they interviewed 10 percent of these companies and used public financial information to extrapolate their findings.

Data-driven marketing brings to mind companies like Google, Facebook, and Twitter, which collect consumer information, as well as online publishers like CNN.com and ESPN.com, but the majority of spend for the data-driven marketing economy comes from offline channels such as direct mail, where 85 percent of mail is targeted to individuals. "It's the most mature of the channels," Deighton explained. As digital comes of age, revenue from online channels will likely increase, he predicted.

Deighton and Johnson forecast that the data-driven marketing economy will lead to more efficient messaging and potentially cheaper products. "In sector after sector, we found a consensus that the value of targeting data comes from efficient customer selection rather than persuasion," the authors stated in their paper. Marketing costs partially account for the upcharge between wholesale and retail prices, and reducing those costs can lead to better pricing for customers.

The study also explored the ability of data to equalize small companies and large enterprises. "The advent of low cost or open source Web scale analytics software means that data intensive market insights are now more accessible to mid- and smaller size enterprise," Deighton and Johnson stated. Small start-ups can better reach their customers if they are able to access an existing pool of data, in turn fostering innovation in the U.S. economy.


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