A survey by the Economist on the usage of data within companies found that 1 in 4 admitted that vast quantities of useful data went untapped, with 1 in 2 conceding that they leveraged less than half of the data they had available. A successful big data strategy requires organisations to overcome the challenges of Volume, Variety and Velocity of information to arrive at better decisions. Data fact or fiction? Web 2.0 has certainly added to all of the V’s in this equation, but how do we separate fact from fiction? And how much unnecessary cost has this added layer of complexity added to your bottom line? In a psychology experiment carried out by Leeds University Business School experimenters asked people what snack they would like to have in a week’s time – a banana or a chocolate bar. Most people made a banana their advance choice. The following week the experimenters returned and offered the same people a snack to have straight away. No mention was made of their previous choice. Most people, especially women, opted for the chocolate. Had this not been an experiment, but instead, it was a social media campaign with my target audience all “liking” my Bananas, how much time and energy could I have spent analysing what turned out to be aspirational data? Worse still what if I had used this to make or influence product or production planning decisions? I’ve used figure 1 below to reclassify data into three new categories: 1. Facts. Based on verified information and transactional data. 2. Aspirational Data. This is based on what your customer shares publicly via social media or privately through market research and surveys. 3. Predictive Data. Using statistics and algorithms to predict customers buying patterns and behaviours. Figure 1 1. Facts should be the #1 priority in any data strategy The Economist’s research also showed the 1 in 3 organisation still don’t have a formal process around data management, with a further 27% investing time validating and scrubbing their data. 34% of all respondents rated data quality as very problematic. So, before we rush into adding to our volume, and variety with web 2.0 and social media, there is still a lot of ground work and competitive advantage to get gained by getting the basics right. I attended a seminar a number of years ago where the speaker was the head of strategy for a global organisation. He was very proud of the fact that his organisation had ditched the traditional customer segmentation model for an event-based model. This relied heavily on a solid foundation of transactional and factual data allowing him to market to his customers only when they were in the buying cycle. (This had a massive impact on both the efficiency and effectiveness of all of his marketing activities) This could be the birth of a new child (based on nappies suddenly appearing in my loyalty card data) or an upsell to a “Gold” or “Platinum” credit card based on an identified increase in my salary from my banking data. A solid foundation here is also the key to unlocking the potential and value of predictive data. (see 3) 2. Aspirational data big picture only If you look at my Pinterest boards (and loads of other people boards). They are full of aspirational data. My “dream garage board” would cost me millions to buy and there’s not one car on there that I actually have the cash to buy. It’s the same story on Facebook and Google +1. In the same way if you asked me what I wanted for a snack I would probably say a banana (aspirational data), but when it came to making the choice I’d probably choose the chocolate bar (factual and predictive). From my perspective aspirational data can be hugely valuable in identifying big picture trends, and as a cost-effective way of validating new products and concepts (see my post on Lean Start Ups) Would I place a high level of reliability on it? And invest heavily in analytics and integration? Probably not. 3. Predictive data a source of competitive advantage Having not worked in an intelligence agency, been a criminal profiler, nor do I possess savant abilities in maths, means this is the area I’m least qualified to talk about, but believe has the most potential. Pictured above is my New For You list from Amazon. I’m not sure what this says about me, however it is based on factual transactional data (not allowing for gifts I’ve bought for friends and family – that’s my excuse and I sticking to it!) and it generally comes up with some very relevant recommendations, which result in me buying more books than I would have done otherwise. In figure 1 above I’ve placed a pot of gold at the intersection of Factual, Aspirational and Predictive Data, as this is, in my option is as close to perfect information as we can get. Now if Toyota can apply my model to use my Pinterest (aspirational) profile to establish my love for sports cars, filter out based on my factual data that I don’t have the means to buy a Lamborghini Aventador, but instead offer me a great deal on the more reasonably price GT86 then I would be a happy man.
Don’t waste time worrying about privacy issues and Big Data, let’s just focus on the end game for online marketing
I watched a documentary this week on how science fiction has inspired innovation and in particular George Lucas and his pioneering work through Industrial Light and Magic.
According to the documentary the Star Wars targeting computers were the inspiration for the head ups displays (HUDs) in most modern fighter planes, and more recently luxury sports cars.
Luke Skywalker’s robotic arm in Empire Strikes back sparked a wave of innovation in prosthetic limbs, which can now be hard wired to our brains to give feedback on touch and pressure. This is huge leap forward technology since the film was screened in 1980.
So what innovations will more recent Sci-Fi movies inspire?
I’m thinking Tom Cruise in Minority Report, and Jude Law in eXistenZ as two that spring to mind.
There’s been a lot of press coverage about how Big Data will change the world, and I believe it will as it has huge potential (but with a twist)
In a study by Mckinsey & Company they refer to Big Data as “The next frontier for innovation, competition, and productivity”
“The use of big data will underpin new waves of productivity growth and consumer surplus. For example, we estimate that a retailer using big data to the full has the potential to increase its operating margin by more than 60 percent.”
Online and permission based marketing
Invasion of privacy in the online word continues to generate controversy with Facebook, and other social media sites and online stores continually pushing the privacy envelope. The most recent response to this has been the EU’s cookie directive, which took effect on 26th May 2012.
The ultimate end game
From my perspective I believe there are huge benefits for the consumer and retailer by sharing perfect, personal information with a trusted third party and intermediary.
I’m thinking about using crowd funding to raise capital for my ultimate version of social media and online marketing, Facebuck.
With some simple integration of existing technologies, and some focussed R&D on some emerging ones, I believe we can cut to the chase and create the ultimate permission based marketing system, and avoid the expense and hassle of worrying about Big Data.
Bio Metric Integration
Facebuck’s point of difference is simple. Instead of worrying about the privacy and use of your social media and other personal information stored in thousands of CRM systems, you simply pop into one of our approved medical clinics and have a smart bio chip inserted under you skin.
A bit like the ones my dogs have, but with nano-technology that constantly samples bio metric and location information that transmits in real-time to Facebuck.
It’s all or nothing when it comes to accessing your personal data
There are no opt outs here. Its 100% of your data or 0%.
So now we have access to all of your information this is where the fun begins.
Instead of your pieces of your personal data being fragmented and duplicated billions of times in the cloud, and then analysed in real-time in an attempt to create the perfect advert for you, Facebuck simply uses its much smaller packet of perfect information to match its services to your state of mind, mood, location, financial circumstances, and permissions you have set.
Tired, stress, in a bad mood? (Facebucks facial and voice recognition systems, combined, with its heart rate bio-math and blood chemical analysis will already know this).
No point trying to sell you something if your not going to be receptive to it? Instead why not play some relaxing music and change your display to a range of images that will put you in a better state of mind? (Puppies, Kittens, Mountains or Beaches?)
Inbuilt safety and protection
Late night surfing after a few beers or glasses of wine? Facebuck will detect your raised blood alcohol levels and engage “safe” mode. This will prevent you from bidding online for things that you don’t need. I knew of someone who bid on and won a clapped out VW Camper Van after an extended trip to the pub.
Safe mode will also protect you from adding embarrassing posts that you might regret in the morning.
Huge cost savings for any company in the consumer or retail sector
What would it be worth to any retailer or consumer business if their conversion rates from online advertising ran close to 100%?
How much would they save if they outsourced their entire online advertising and marketing team to Facebuck, who would in turn create perfect “offers” for each one of their individual potential customers in real-time?
So, as a retailer, for a modest percentage (lets say 2.5%) of your ideal customer’s annual value, Facebuck will guarantee to increase your digital adverting conversion rates by 100%, or you pay nothing.
For the consumer it’s completely free, and you can cancel your subscription at anytime.
Don’t like the sound of Facebuck? My plan B is an online search engine and marketing tool called “Gaggle”
Gaggle offers a free search engine for its users, and pay as you go advertising service for retailers. Your initial costs might be lower but you have to fight it out with the hundreds of millions of other advertisers and marketeers all trying to second -guess their ideal customers emotional needs and buying patterns.
Oh and don’t forget to add in the time and cost for your Big Data strategy.
Ok, so I’m only trying to promote some discussion with these very much tongue in-cheek points of view, but I would love to hear your thoughts on where the worlds of social media and online marketing are heading?
Link to McKinsey & Company report http://bit.ly/MIbVfH
Link to Forbes article on EU cookie directive http://onforb.es/JtZntF
Link to Inspired By ‘Minority Report,’ Immersive Labs Raises $810K For Digital Display Recognition http://tcrn.ch/q`vW2U4
- Chocolate or Bananas? Which one will you invest in when it comes to your data strategy?
- Big Data – Facebook vs Google who will win the battle for digital advertising?
- Why you need Top Gear’s Jeremy Clarkson to run your next Strategic Planning Session?
- The lean version of “Lean Start-Ups”
- Sometimes less is more when it comes designing your customer retention strategy