Why You Need a Data Taxonomy

March 13, 2018 Moira Freeman, Product Marketing Manager, Nielsen

Taxonomy: the practice and science of classification

The digital era has ushered in a new age for marketers. There are more ways than ever to reach and engage consumers. But finding your best customer as they move along a tangled digital path requires a sophisticated understanding of digital-era tools and tactics and a clear strategy.

Setting up a taxonomy is like organizing your silverware into forks, knives and spoons so you can quickly grab the right one when you need it.

One of the emerging tools for digital marketers is multi-touch attribution -- a solution that accounts for the cross-channel customer journey -- instead of relying on a last touch model.

Multi-touch attribution harnesses your data like a seasoned cowboy at a rodeo so you can get the insights you need. But making the most of this tool requires a few key steps first.

You’ve got to put your boots on before you hop in the saddle. Building a data taxonomy is one of those steps. Getting it right will help you nab the prize-winning belt buckle and get the most out of your attribution platform.

What’s a Taxonomy?

Taxonomy comes from the Greek τάξις, taxis (meaning 'order', 'arrangement') and νόμος, nomos ('law' or 'science'). Today, it’s used for the classification of things or concepts, as well as the principles underlying the classification.

In marketing attribution, taxonomy refers to hierarchical classifications and naming conventions for touchpoint dimensions. These are the elements of your marketing and advertising initiatives such as creative, placement, keyword, publisher and more.

Taxonomies standardize data inputs and outputs to and from your attribution platform to ensure that the analyses, insights and recommendations from your solution map directly to your brand’s unique jargon and business goals.

Setting up a taxonomy helps you categorize your data so you can use it. It’s like organizing your silverware into forks, knives and spoons so you can quickly grab the right one when you need it. Putting your forks in the bin marked “spoons” will make it hard to eat your soup at dinner time.

Every marketing organization has its own unique taxonomy because each brand has different lines of business, specialized channel teams, or campaign objectives. Your goal is to define a taxonomy that aligns with your organization’s unique structure and vocabulary.

Why is a Taxonomy Important?

Online, everyone leaves digital footprints that show who they are, what they like and how they behave. This "addressable" trail has given rise to a new generation of marketing that’s people-based. It’s also introduced the ability to drive meaningful experiences with consumers across channels and devices.

To truly understand the value of each consumer interaction with your brand, it’s not enough to count impressions or the consumer’s last interaction (i.e. last-touch metrics). Marketing organizations and their agency partners must rely on a measurement approach that offers a holistic picture of performance and makes it possible for everyone to work toward shared goals.

The first step is organizing your data in way that makes sense for your business. Defining a universal taxonomy will start you off on the right foot to more effective marketing.

A Framework for Your Data

A taxonomy provides the framework for the data in your attribution platform, and enables you to analyze the performance of the media dimensions that matter most to your business. Your taxonomy means your data is consistently categorized across multiple sources and channels.

With data consistency comes data legibility -- the ability to understand and react to changes in performance. Legible data improves the speed and efficiency with which you can execute marketing and media optimization recommendations. Without a standard taxonomy, you may end up struggling with the time- and resource-intensive task of manually breaking down and re-aggregating data in order to tell the story in a way that is meaningful to your business.

Building By Tier

Every taxonomy has a tiered structure. The structure of the business and its reporting needs determine which terms you choose for each tier. For example, your company may want to measure marketing and advertising by channel, region, or product.

Many brands choose to look at their data through the channel lens, because they allocate their marketing and media budget by channel such as paid search, display, video, social, etc. These brands would place “Channel” at the top tier of their taxonomy, and the names of each channel would appear at a lower tier.

Some businesses allocate budget by region. They might choose “Geography” for the highest level of their taxonomy. A parent company with multiple brands might choose “Lines of Business” as their top tier, because they wish to understand performance, at the highest level, by their brands.

While not all dimensions exist across each channel (or geography or product line) in your marketing mix, it is important to retain as much similarity as possible in order to preserve the flexibility of “slicing and dicing” performance across uniform views. A standardized taxonomy normalizes channel differences and provides the objective perspective required for cross-channel optimization.

Delivering Results

With an understanding of how taxonomy works and careful management of the taxonomy development process, you will be on your way to benefitting from the actionable, audience-driven marketing intelligence you need to deliver meaningful business results.

Learn More

Download our ebook Why You Need a Data Taxonomy to learn how define a taxonomy that aligns with your organization’s unique structure and goals.

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