Over the last few years, there has been a trend in media marketing: bigger budgets, bigger stages, and bigger payouts. Driven by statistics based marketing approaches, modeled as consumer-focused ideas, businesses have been pouring millions of dollars into advertising using time-honored strategies and carefully curated data to make their products and projects bigger, better, and (hopefully) more customer-oriented.
The result? Failure after failure, flop after flop, and unsatisfied customers venting their frustrations on X (formerly Twitter)
But why is that? Why have companies started to fall out of favor with their customer segments, and why have businesses seemingly been unable to hit the mark when it comes to their plans and predictions? Today, we hope to shed light on the failures of some modern businesses to expose the unfiltered truth of why statistics based marketing both works and fails in the modern information era.
What is marketing, and what is data?
Marketing is an interesting topic, one we hold quite close to our hearts here at Diamond Litchi. As marketers ourselves, we keep abreast of the latest happenings in media, industry, and finance, and we try to see where the path will lead. That isn’t uncommon; most people tend to keep up with the latest developments in their industry, but their approach can often leave a lot to be desired.
Take marketing, for example. Many people misconstrue it. Ask any student or person off the street what marketing is, and they’ll likely tell you that it’s advertising. A few might get fancy and answer that it’s the act of appealing to a market to get them to purchase or use a service or product.
And while those answers aren’t wrong—they do capture the end goal of marketing campaigns, which is to entice people into buying your product—they aren’t entirely correct either.
At its core, marketing is the presentation of an argument: an argument for why you, as a viewer, should use what you’re selling. It’s about connecting with people at their core—understanding their wants, needs, and desires—and convincing them that you can give them what they want, need, and desire.
But how do we determine what they want, need, and desire? That’s where data comes in.
The Role of Data in Marketing
Data, at its core, is a simplified reflection of life. It distills complex quantities into easily understood 1s and 0s, offering a quick, precise way of finding truths in a world painted with uncertainty. Throughout history, data has been used to build empires, wage wars, and make decisions that shaped the very world we live in. It forms the foundation of science, mathematics, medicine, and more.
However, data can also mislead, and when misunderstood, it can cause massive damage.
No matter how broad or in-depth a study may be, data will always be a summary of reality, never reality itself. It can help us make decisions, but it must never dictate those decisions, and this is where many companies fail.
Many marketing teams look at trends, data, and the general zeitgeist, making decisions based on those factors. Decisions like how much money to spend on this, where to market that, where to allocate resources, and where to cut back are often made by those at the very top. When we view it through this lens, the biggest flops of the last few years start to make sense.
Why Statistics Based Marketing Fails to Deliver
Let’s take a simple example. If I were to roll a 20-sided die, what would be the chance of rolling a 20? What’s the chance of rolling a 1? And what would be the average result of multiple rolls?
Statistically speaking, I’d have a 5% chance of rolling either a 1 or a 20, with an average result of around 11 to 12. But the reality could be very different. The die could be weighted, I could use a specific rolling technique, or I might roll ten 20s in a row purely by chance.
This crude example illustrates how easily statistics can fail to match reality. Statistics provide an easy way to view likely results and average outcomes, but they don’t always align with the world we live in. They are guidelines, simplifying the picture, not making it truer.
This is where statistics based marketing fails. Companies observe the latest trends in news, media, and society, plan around them, and make decisions based on those assumptions. They assume that, because a topic is trending, reality must reflect the truth of that data. Often, they are caught off guard when it’s time to deliver
Case Study: Xbox One – A Lesson in Misreading Data
In the early 2010s, Xbox and Sony were preparing to launch their next-generation consoles, the Xbox One and PS4, respectively. Xbox, which had held a strong lead during the PS3 and Xbox 360 era, could have maintained its dominance in the next generation—had they listened to consumers instead of relying on what they thought people wanted.
The Xbox One failed in comparison to Sony’s PS4. Leading up to its announcement, rumors circulated that it would come with features disliked by the core gaming market, such as Always Online and non-resale games. Gamers quickly voiced their concerns online, but Microsoft ignored them, believing these changes wouldn’t significantly affect their bottom line due to the potential influx of new casual users.
As you might have guessed, they were very wrong.
Phil Spencer, head of Xbox, has since admitted that they lost the most critical generation of consoles to win. Today, Xbox as a console brand is in a precarious position, all because executives relied too heavily on statistics, thinking there was more money in their original strategy than in what turned out to be the winning formula.
While statistics weren’t the only reason behind Xbox One’s failure, they played a significant role in the decision-making process.
How to Avoid the Same Failures
Data and statistics have their place in decision-making, but they should never be the sole reason for making a decision. In our experience, statistics based marketing works about as well as flipping a coin. What truly matters is how you approach your customers.
What do they want? The easiest way to find out is to ask them and listen to their responses. Google your business, talk to customers as they come in, and listen to feedback on how you can improve. Focus your marketing on the actual concerns of your target audience
Don’t aim to sell a car based solely on the age of your audience. Instead, sell what the car represents—reliability, speed, affordability, freedom. If you’re making a movie, sell the premise and themes, not just the actors or a message.
In this age of rapid information flow, the way you connect with people through directness and shared ideals matters far more than the social message you’re trying to sell. As a die-hard Apple hater, there’s little you could do to make me buy an Apple device because I understand the power of branding. But if you pitch it well enough, who knows? I might reconsider.
Ultimately, I should not be Apple’s target market, and neither should many others who think the same. A true marketer looks at statistics based marketing, reads the data, nods, and uses it to make decisions smarter and faster. A bad one takes the data at face value and runs with it, ignoring all the red flags [‘You can be blinded’: The perils of falling into the data trap].