DATA DAY ENQUIRIES

Geographical information systems (GIS) have been massively under-exploited by marketing organisations. Market watcher Benchmark says 82 per cent of UK companies that should be buying GIS applications have not done so because they do not understand the benefits of these systems.

Ironically, this is largely down to the failure of GIS suppliers to market their products effectively. They have focused too heavily on the technological attributes of GIS and failed to target the companies that need them most.

“GIS companies have been selling GIS, rather than business applications,” explains Steve Sawko, sales manager for Market Analysis, a GIS developed by Cambridge-based Laser-Scan.

“As a result, the penetration of GIS in marketing organisations is very low – I’d guess less than three per cent of companies. People still think of GIS as a technical system used by utilities and local government organisations. No wonder marketing organisations haven’t rushed out to buy one. If we talked about ‘media planning tools’ I’m sure their interest would intensify,” he says.

The GIS is a data analysis system which organises and views information geographically – using maps. Historically, the main users have been the utilities and central and local government. They use the systems to track and manage their

assets: networks of pipes, cables, council houses, street lighting, and so on.

But maps can also be used to integrate information about consumers and geographic data to highlight the density of customer activity in particular regions. Sawko says: “Because they are shown the data as a picture, it is much easier for sales managers to see, for example, that area X is bigger than area Y.” Or that London postal region N7 is adjacent to postal area N19 but miles away from N8.

By visually relating customer profile data to, say, the distance customers live from various supermarkets, marketers get a better idea of where to target direct mail campaigns. By bringing factors such as accessibility by road into the equation, they are better able to understand why customers choose to shop at one store rather than another.

Graeme Egan, account manager at GIS supplier Smallworld, says: “There is a growing awareness among retailers of how GIS technology can be applied in the area of ‘customer processing’. Because of market saturation and a lack of new sites, these organisations have had to shift their focus from expanding into new territories to maximising the potential of existing locations. Understanding the complex

relationship between outlets and customers can be improved through use of GIS.”

There has been a recent flurry of activity at the low-end of the GIS market, which has seen the emergence of several stripped-down products that are a fraction of the cost of the traditional GIS, much easier to use and run on standard PCs rather than expensive high-end workstations. Such products have been developed to encourage take-up by business users.

In some cases, vendors have started talking about “desktop mapping” instead of GIS. While some would argue that desktop mapping is GIS’ poor relation, others maintain that its solutions are more relevant to the needs of marketing.

“The single biggest advance in GIS has been accessibility,” says Laszlo Bardos, European marketing director at MapInfo, one of the more prominent names in commercial GIS. “With the arrival of the desktop GIS, the technology is easy enough for people to use without much training. We talk about desktop mapping to make the distinction.

“The traditional GIS is notorious for its complexity. Even though it could solve problems in marketing organisations, it is too impractical to use. It required a bureau or full-time GIS specialist to run it. This severely limits the benefits that an organisation can get from this technology because, as a decision-making tool, the GIS should be in the hands of the people who are making day-to-day decisions,” he says.

Bardos lists demographic analysis, site analysis, territory planning, market analysis, direct response targeting and advertising planning as potential applications for desktop mapping. “Desktop mapping is highly adept at targeting and tracking customers,” he says.

“In addition to displaying the best potential sources for a direct mail or telemarketing programme, the systems can also be used to chart customer responses. In advertising, the technology can be used for managing billboards and establishing the most effective locations for billboard campaigns,” adds Bardos.

Brann Direct Marketing is among MapInfo’s users. Principal consultant for the company’s marketing information consultancy unit Roger Bracewell says: “Our clients want to build profiles of their customers and cross-tabulate the data against a whole list of variables such as income, geography, social class, newspaper readership, and so on. For business-to-business sales, one frequent objective is to be able to match the geographic distribution of customers against service or sales points. The beauty of MapInfo is that it offers features that have typically only been available in the high-end, expensive GIS. It has added significant value to our work.”

MapInfo is a technology company first and foremost, and recognises that it doesn’t have the in-depth market knowledge required to evangelise about its products. Instead, it sells them through an army of specialist third-party suppliers who are closer to the end-user.

CCN Marketing commercial director Nick Pompa says data is as important as the GIS itself: “Mosaic combines PC analysis software with our own data sets, which we have been continually developing. The past year has been very exciting for us in terms of new data developments. Statistical techniques have enabled us to develop new regional classifications and, for the first time, European classifications. We’ve also developed other types of data sets besides geodemographic data. For example, our new Psyche system allows segmentation based on consumer values. And we can now offer industry-specific data.”

John Taylor, managing director of Geoplan – a joint venture with the Royal Mail which maintains and exploits postcode-related data sets – says marketers should take care that when buying a GIS they aren’t tying themselves into a proprietary data source. “Some systems – those that are geared to consumer marketing using geodemographic techniques – can be inflexible. Users want to be able to integrate and analyse diverse data from both internal and external sources. With some systems it isn’t easy to do that,” he says.

Taylor says the appeal of the cheaper, entry-level GIS comes from the fact that they are not tied to a particular data supplier.

Strategic Mapping’s Atlas GIS is a good example of an entry-level product. It costs about 300 and is apparently very easy to use. The company is so keen to promote GIS-based functionality that it is campaigning to introduce mapping techniques to standard desk-

top office applications. US spokesman David Radoff says: “We are forming alliances with other software developers to map-enable most of the widely used desktop applications, such as Lotus 1-2-3 and Novell Office.

“We have also begun working with database developers such as Oracle to integrate GIS technology into larger corporate databases. Until now, you couldn’t ask an Oracle database to tell you how many customers were within five miles of a store, or to give you the demographic characteristics of your customers in that five-mile area. That’s the sort of thing we’d like to achieve,” he says.

Sue Norris is features editor at The VAR magazine.