DMA 2014: As Data-Driven Marketing Gains Traction, Governance and Analytics Present New Challenges

SAN DIEGO—Customer expectations are higher than ever, and brands that have yet to adopt a more data-driven approach to marketing are playing catch-up, JoAnne Monfradi Dunn, chairman of the Direct Marketing Association, said during her keynote address at DMA 2014 on Monday.

Dunn also pointed out that marketers are facing a number of other challenges, including unprecedented amounts of data, a marketing environment that's become more "fear-based than fact-based" due to increased scrutiny, a proliferation of new solutions and technology, and a significant talent gap in the industry.

When it comes to the data challenge, Dunn said the DMA has made great efforts to help marketers feel more prepared both in terms of collecting data responsibly and extracting meaning from it. Throughout the last year, marketers logged roughly 70,000 hours in professional certification and education through customized learning programs at the DMA, she said. A study conducted with marketing cloud solution vendor Adobe earlier this year revealed that 81 percent of marketers felt unprepared to tackle the need for better governance, and the DMA has worked "hard to ensure that these marketers aren't marketing alone," she said.

During her keynote, Dunn also discussed the importance of self-regulation in the marketing space. "Where there's trust, self-regulation is possible," she said. "For the last forty years, the DMA has led the charge in self-regulation...but self-regulation requires business guidelines," she added. To that end, the DMA released a new guide to data breach notification at the conference to "help companies better prepare for a data breach situation and learn how to connect with their customers during that time," she explained.

Though data governance was among the key themes at day one of the DMA conference, leveraging analytics to better understand customers and provide them with more personalized, targeted experiences was central to the discussion as well. Former Los Angeles Laker  Earvin "Magic" Johnson took the DMA stage to talk about understanding consumer needs, and share his advice for marketing success.

After a successful NBA career, Johnson was "looking for something meaningful to do with the money he had saved up while playing," he said. Soon, he realized that blacks and Latinos in the U.S. had roughly 13 trillion dollars in disposable income, and yet "no one was going after that market." These groups were, for example, avid movie theatergoers, but there were few movie theaters where they lived, according to Johnson. So, he worked to open theaters in urban areas and experienced massive returns, he recalled.

Johnson also discussed how he convinced Starbucks CEO Howard Schultz to allow him to franchise several Starbucks locations and open them in urban areas. "I'm the only person in North America besides [Schultz] to have owned Starbucks locations," he said. Eventually, he built 125 Starbucks locations and earned $4.59 per capita in urban America, while Schultz earned only $4.51 in suburban America.

The reason for his success, Johnson explained, was he understood his customers and customized the products and services to their needs and preferences. "They told me that minorities wouldn't pay three dollars for a latte. We will, but we don't quite know what scones are," he joked. "So I swapped the scones out for pies and pound cake and got rid of the Eagles music and played some Earth, Wind and Fire. I had a lot of success with these," he added.

After years of targeting minority consumers as well as training and educating minorities for career opportunities in his companies, Johnson 

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