Big Data and You

Stephen DeAngelis

March 25, 2013

“Did you know,” asks a blogger named Klaus, “that 90% of the data in the whole world today has just been created as of 2012?” [“Big Data – Its Importance and How It Affects our Everyday Lives,” Tech Patio, 4 March 2013] The amount of data created each day is staggering. Klaus claims that each day “we create about 2.5 quintillion bytes of data!” You might be surprised to learn that you contribute to that ocean of data, knowingly and unknowingly. As Klaus points out, “This data actually comes from many sources including but not limited to: sensors utilized to collect climate information, digital pictures and videos, software logs, mobile phone GPS signals, purchase transaction records, and let’s not forget, posts to social media sites. All of this is known as big data.” Big data, however, is a lot like garbage piling in city streets during a sanitation workers’ strike unless something is done to make it useful. But, as Klaus points out, big data is “so huge and complex that it becomes hard to process with the use of conventional data processing applications or on-hand database management tools.”

Ignoring it, however, is really not an option since it contains valuable information that can change the course of businesses and individual lives. One of the ways that organizations use big data analytics to serve and protect us involves leveraging it “in order to improve … existing procedures and processes.” Klaus provides a few examples:

Science and research companies – The decoding of the human genome originally took 10 years to process in the past, but now it can be achieved in just 1 week!

Financial services companies – since these companies already execute fraud analysis, they can utilize big data from other sources, thus improving the process and even identify potential issues much faster than ever before.

Police and other law enforcement agencies – big data technology aids law enforcement personnel to analyze streaming video footage in real time and specifically point out smaller chunks of video relevant for review, rather than relying on human eyes to look at each and every frame.”

Klaus also points out that manufacturers and retailers use big data “to do something utterly special and/or unorthodox, offering ‘fresh, out-of-the-box marketing opportunities’ from already-existing, previously untapped data.” Most marketing specialists agree that personalized or “targeted” marketing is next big thing. It offers the right product to the right consumer at the right time (and, if adopted widely, could spare consumers from receiving irrelevant offers for products or services in which they have no interest). For more on this subject, read my posts entitled Marketing to the Individual and The Importance of Location in Targeted Marketing. According to Klaus, another way that big data analytics affect your everyday lives involves making your transactions easier, especially purchasing transactions that involve something other than cash. He concludes, “No matter how you look at it, big data … is something that aids in making one’s business more agile and flexible, it helps in finding insights regarding new and emerging kinds of data and content, and it helps in making processes more efficient and faster than ever before.”

Not everyone is as sanguine as Klaus about finding the gold buried in mountains of data. Richard Stacy calls it an “actionability” problem. [“Big Data: Gold Mine or Fool’s Gold?” Social Media Architecture, 1 March 2013] He certainly doesn’t dismiss the potential of big data analytics. He writes:

“In the world of Big Data it is theoretically possible to know as much about your consumers as they know about themselves: to be able to anticipate their every thought and desire and be there with an appropriate product or response. It is a world of ultimate targeting and profiling and this world is tantalisingly within reach because of the huge amount of real-time, personal information consumers are giving away about themselves via their usage of social media tools.”

Regardless of the potential of big data analytics, Stacy writes, “The problem is that no matter how good we think we have become at this, we haven’t actually been that good.” From all that I’ve read on the subject, I think Stacy is correct. He also believes, “Even if we can now use Big Data to find exactly the right time, to talk to exactly the right person with exactly the right message – organisations are just not set-up to know how to handle this situation appropriately.” That’s a problem. He continues:

“The world of social media is the world of the individual, whereas the world of traditional marketing is the world of the audience. We have become very good at speaking to audiences with single messages, but we have no experience as to how to talk to individuals, where our behaviour has to be social and the information we give has to be highly specific and relevant and where we also have to recognise that the task is not simply to target conversations, but to create the permission to enter a conversation. In reality, there are very few consumer conversations that it is possible for a brand to enter. A consumer may be having a conversation about shoes with her friends, but this doesn’t mean that she has given permission to have this conversation interrupted by a shoe manufacturer or retailer. So no matter how precisely we may be able to use Big Data to identify the conversations we would like to join, it is likely that the majority of our attempts to enter these conversations and strike-up relationships will be rejected. … So ‘actionability’ is the first big problem with Big Data – relevancy of response and the creation of permission to enter a conversation or create a relationship. And this question of permission brings us onto the next problem. As we have seen, brands need to create permission from consumers to enter their conversations – but brands also need to create permission to have the data about these conversations in the first instance. It is very easy for a consumer to see the collection of Big Data, once they know it is going on, as a form of digital spying. In fact it is very hard to portray Big Data as anything else.”

The actionability challenges highlighted by Stacy (i.e., entering into a conversation with consumers and getting permission to collect personal data) are being addressed. Laurent Faracci, the U.S. chief strategy and marketing officer for packaged-goods giant Reckitt Benckiser, told Jack Neff, that if he had his way, “100% of our digital media would have a call to action.” [“Years After Ditching the Click, CPG Marketers Embrace Web Ads With ‘Calls to Action’,” Ad Age, 25 February 2013] Although that sounds like Faracci wants consumers to back some kind of cause, his “call to action” refers to invitations that ask consumers to “click here” or “take the challenge” or “enter to win.” In other words, he is recommending ads that can result in voluntary conversations with customers. He claims, “The return on investment is three times better when you do.” Chris Pape, Executive Creative Director at Genuine Interactive, told Neff, “The key principle is: If people are taking action, they’re retaining information better than if it’s passive. We’re big fans of adult-learning theory, which says if you’re passively watching information, it’s not really being sent to long-term memory.” Neff continues:

“A 2010 study by WPP’s DynamicLogic found no link overall between a call to action and effects on recall or brand favorability, but did find that call-to-action digital ads do better on purchase intent for CPG and travel advertisers. Across industries, ads asking people to ‘send something’ or share doubled brand favorability and purchase-intent scores compared with the average ad. … Call to action is a big part of CPG digital advertising largely because much of the budget is coming out of promotional buckets, said Gian Fulgoni, chairman of ComScore. Accounting rules don’t count such spending as marketing, but CPGs spend 67% of their all-inclusive marketing dollars on retailer trade promotion, he said, citing data from Kantar and SAP. Media advertising of various forms makes up only 22% of spending, while consumer promotion — largely around distributing coupons — makes up 11%. Almost half of digital ads in CPG have some kind of promotional message,’ Mr. Fulgoni said, compared with 8% of TV ads.”

The point is, call-to-action advertising is a good way to enter into conversations with consumers. These kinds of permission-based conversations help remove some of the negativity associated with big data collection. Chris Hornbeck, CEO of Resort Insiders, believes permission-based advertising will become more of the norm. [“Permission-based marketing leads the way,” RCI Ventures, 4 March 2013] He writes:

“The basic concept of consent-based marketing is to gain a potential customer’s attention in a way that a voluntary communication is created between the marketer and the customer. That communication can be either inbound (initiated by the customer), outbound (initiated at the request of the customer), or even face-to-face – but the keyword is voluntary. When a customer contacts a company out of interest in its value proposition, or leaves his number for a call back, they have effectively become a ‘warm’ lead. The beneficial marketing atmosphere created by this type of voluntary communication leads to lower labor costs, higher conversion rates, and overall higher sales efficiencies. Permission-based marketing methodology is based on looking for responders, people who see and are interested in a value proposition and give express permission to speak with them about it. This permission can be granted in many ways. … To find these responders, companies can place value propositions in different advertising channels … based on popular premiums or services. … Value propositions can even be in the form of informational or educational content. … The importance of an honest, high-quality value proposition cannot be understated. In this age of highly-educated consumers and comparison shopping, the value proposition must be competitive, well-considered, and beneficial to the end user to maximize conversion.”

The bottom line is that consumers are gaining more control over their conversations and their data and that trend is expected to continue — and that’s not a bad thing.