The trend towards targeting advertising at individuals rather than general audiences is driving digital marketing agencies to improve their data science capabilities.
Marketing giant Dentsu Aegis has recognised the need by setting up its first global data innovation centre here, in Raffles Place.
The centre, which opened yesterday and is supported by the Economic Development Board, aims to be more strategic about innovation.
"To be a truly innovative organisation, you can't just expect innovation to happen," said Mr Nick Waters, chief executive of the Dentsu Aegis Network for Asia Pacific.
"It's not going to move the needle if you just take an organic approach... so we decided we needed a centre and a systematic approach, bringing innovation to some of the core challenges that the marketing services industry faces."
He added that Singapore beat locations such as Silicon Valley for the centre because of its access to talent, good infrastructure and a dynamic market, which allows the company to test solutions quickly.
The initiative has been prompted by a shift in advertising, as many marketeers now rely on sophisticated data and technology to show tailored ads to individuals.
The shift has led marketeers to collect and analyse more data, which could come from tracking websites consumers browse to noting patterns of social media usage.
Ms Audrey Kuah, the centre's managing director, recounted the germination of the idea for the facility five years ago.
She faced a client question related to prediction. Prediction models typically use known data such as information on consumers who had bought a product. But her team thought this was inadequate as they needed to learn about consumers who had not bought the product.
This prompted them to look for more data on would-be consumers. While the client had the data set, it was so huge that Ms Kuah had to send her team to a Challenger store to buy a three terabyte hard drive, which she jokingly calls the company's "first data centre".
Ms Kuah said the innovation centre will begin with a focus on understanding what prompts consumers to take action. Mapping the digital footprints of consumers, for example, could yield insights that lead to better predictions of behaviour.
The centre has 15 staff members, with plans to hire 20 more data scientists, engineers and analysts by next year.
Mr Waters said digital marketing is fuelling advertising's growth. Singapore's projected digital marketing spend this year is US$322 million (S$438 million), up from US$285 million last year.
"What we are doing with the centre here is, if we can understand these massive flows of data, and we apply intellectual property to create value out of that data, that's where Singapore's opportunity is," he said.
