At the end of last year, the global data analytics market was valued at more than USD 61 billion. With expectations that it will top the USD 580 billion mark by 2033, providing organizations across industry sectors with relevant insights into data is becoming a booming business. For businesses in Africa, harnessing the right data sets most effectively to stay ahead of the curve becomes a competitive advantage, especially when it comes to marketing the brand to an increasingly connected customer base.
“At its core, effective data analytics requires an understanding of historical data to better plan for an uncertain future. It is one thing to accumulate vast amounts of data, but another thing entirely to extract actionable insights from it,” Fisokuhle Tshivhandekano, Managing Director of Idea Hive South Africa, said.
The latest estimates show that more than 328 million terabytes of data are created daily around the world. Many analysts agree that 90% of all available data was generated in the last two years. From a business use case perspective, it therefore becomes a matter of trying to find an exceedingly small needle in a rapidly growing haystack.
“Companies and their marketing agencies must therefore prioritize identifying and analyzing the right data sets that align with specific business objectives,” Tshivhandekano said. “This process should entail integrating diverse data sources into a cohesive framework. For example, customer behavior, market trends, socio-economic indicators, and the like are all essential in developing relevant brand campaigns tailored to the needs of specific market segments.”
Big data analytics is vital to gaining that much-needed edge in challenging economic conditions. Those businesses that invest in this are projected to increase their profitability by 20% on average. Within the African context, where market dynamics vary significantly across regions, the ability to interpret localized data accurately is even more paramount.
“In a world where artificial intelligence (AI) has the computing power to deliver analysis at scale, people play an even more critical role in filling in the cultural nuances that are required to deliver effective communication solutions,” Muriuki Murunge, Managing Director of Idea Hive East Africa, said.
AI excels in processing vast amounts of data in microseconds. But this analysis is not only a technological activity. It is also the human touch that brings an understanding of what is being analysed. Tailoring brand campaigns across specific markets in Africa requires experts who have local insights into what works from a cultural perspective. While good, AI does not bring this understanding to its analysis. It certainly connects the dots, but it takes a person to inject that with local relevance to bring value to the organization. This human-centric approach is how we, as a new entrant, are engaging with current and potential clients to gain a competitive edge as we grow our client base in East Africa.
“A survey has found that 80% of consumers are more likely to do business with a brand that can demonstrate an understanding of their cultural preferences. This means AI, in combination with human insights, are essential to develop marketing initiatives that resonate authentically with local communities,” adds Murunge.
Even though analyzing historical data is important, it has complex repercussions for future brand activities.
“We want to use the learnings of the past to make key decisions on the future. But it is also imperative that using cultural nuances to make educated guesses about the audience is key to driving effective communication. After all, not everything in the past is relevant to creating innovative solutions for a digitally connected society,” Tshivhandekano said.
Therefore, by blending data-driven analytics with cultural intelligence, companies can make more accurate projections about what will drive innovation in an evolving market. According to research, culturally relevant marketing campaigns result in a 50% higher response rate compared to generic strategies.
“This underscores the need to inject cultural context into data analytics. Not only will this enhance engagement and relevance, but it has the potential to build a relationship of trust with customers,” Tshivhandekano said.
There are challenges to consider in Africa when it comes to data collection. The digital divide adds a layer of complexity to analysis that requires a different approach than being completely reliant on technology.
“Understanding culture and how it impacts the socio-economic climate is key in delivering work that is tailor-made for the market. From our perspective, we will continue to partner with local data collectors to expand on our already existing data tools,” Murunge added.
Studies indicate that those companies that use local market expertise can experience a 30% increase in penetration and consumer engagement. This highlights how important it is to combine data analytics of the available information with local insights to deliver brand value.
“In the complex African environment, using customer relationship management (CRM) data can be invaluable for additional competitive advantage. Businesses can gain valuable insights into their customers’ demographics, purchasing behaviours, and preferences,” Tshivhandekano said.
An agency can use this and look at how this knowledge forms the foundation for crafting targeted and personalized marketing campaigns that resonate with specific segments of their audience. Companies that use CRM data can see a 73% increase in customer retention rates and a 65% improvement in marketing return on investment. It therefore makes good business sense to capitalize on this resource.
As we forge ahead, leveraging data as a strategic asset and acknowledging cultural diversity will undoubtedly move businesses across the continent toward sustained growth and relevance. Through strategic partnerships and a comprehensive approach to data analytics, companies can unlock untapped potential and lead the charge toward a data-driven future.
BY LEULSEGED WORKU
THE ETHIOPIAN HERALD THURSDAY 2 MAY 2024
