How Can Big Data Create Value For Consumers?
Companies have invested millions of dollars in large data and its analysis, but recent reports suggest, most have yet to see a refund for these investments. In the age where data is the new lubrication, how do smart companies exploit the insights from these gigantic data pools to drive decisions for profit?
In an exciting and influential article, Chris Anderson, editor of Wired magazine, argues, “facing large data, scientific approaches — hypotheses, models, is becoming obsolete. There is now a better way. Petabyte allows us to say: ‘Correlation is sufficient.’ We can stop looking for models. We can analyze the data without the hypothesis of what it can display. “
Discovering hidden patterns in the data has, therefore, become the new Holy Grail. But even if data scientists can find the Holy Grail, these findings are often divorced from business problems. Data is high, but most of us are not design professionals, and we have businesses to run. What we need is insight. Fortunately, there are existing tools that grapple all of this data to the ground and allow you to make some sense of it.
1. Discover trends on Google
Google is easily one of the 800-pound gorillas in the big data space. It is their mission to organize the information of the world and make it accessible globally and usable. We all know that we can use Google to search, but Google offers other free tools that convert data into insights.
2. Monitor social media channels
Keep track of what people are talking about your brand, your competitors, and other relevant search terms for your business. Each one of them can be an opportunity to join, respond, show interest, solve problems or even turn a disturber into an argument for your brand.
3. Keep track of your social graphs
Your social network is a powerful asset. If you’re smart about networking, you can have connections on LinkedIn and Facebook. Perhaps, they are potential customers, contact journalists, bloggers, or other influential individuals can be a benefit to your business.
One of the popular tools to keep track of the most influential people within your network is Newsle. It’s a web-based content search service that combines with the people in your social groups. The site then emails you a list of comprehensive blogs of your friends.
Why do you care? Everybody invested time and energy in developing content. Most would appreciate if you join with it, comment on it or share it, this is an opportunity to enhance connectivity. It also helps you understand their insight when you are advertising them.
4. Get your site quantified
Have you ever seen your website traffic report and wondered, “Who are these people?” Yes, big data can help you answer that.
To get accurate information, you will need to sign up to “receive the number” and place a code snippet on your site; but, it’s worth the effort. When you understand who your site visitors are, you can target them better when you talk to them. You can even find a new market opportunity to pursue.
5. Not just focused. Target again.
Cookies everywhere. Their popularity led to a complete overhaul of how to purchase online advertising. We have previously purchased a website or group of sites that we anticipate that their demographic or psychology would likely suspend our target. Today, more and more, we buy individual groups based on cookie data on a variety of websites on the internet. There are dozens of enterprises that collect data on millions of people and then sell it so you can enhance your display ad targeting.
Companies have succeeded in utilization the power of data starting with a particular business problem and then looking for data to help them make a decision. Contrary to what Anderson lectures, the process begins with a business problem and a specific hypothesis, not data. Consider the following these cases:
Amazon Prime Service
In 2005, Amazon launched its Prime service, offering members free shipping in two days. Traditional on-site retailers have a hard time competing with Amazon due to its pricing and shipping quality. Amazon announced a new service, Prime Now, that allows its members to place orders from more than 25,000 products which can be delivered to their homes within two hours.
How can Amazon provide thousands of products to millions of households within hours when other online businesses lose from three to five business days? Although warehousing and logistics efficiency is part of the answer, Amazon uses the customer’s past buying behavior to predict their future order. This insight helps Amazon optimally locate their repository and store with the right products. Amazon knows the products you can order even before you do. Better predictability from extensive customer data has another significant benefit: Amazon does not keep most of its products in stock for long periods of time, significantly reducing its working capital needs. Its cash conversion cycle is 14 days, which is much smaller than nearly 30 days for most retailers.
Heineken’s World Cities
In 2014, Heineken was facing a worldwide challenge: its consumers, especially young people “in the crowd,” have begun to prefer local beer. How can a global brand relate to these consumers? CEO Heineken realized that drinking beer was part of the social life of customers. So what other things or events have driven and enriched their social behavior? The company finds, that people are using social signals to determine what is hot in a city to reduce FOMO (fear of missing out). Using this insight, Heineken launched a campaign called “The City of the World”.
“Cities of the World”, supported by Twitter account @wherenext, allows consumers send in their geotag locations. What users get in return are recommendations of restaurant, event, or club within their accessible area. Insider information is used to fuel @wherenext algorithms, encouraging consumers to announce their unique adventures. The social-media campaign led to a volume growth of 5 percent in the top 20 markets.
BuzzFeed Native Ads
Native ads or sponsored content often blur the line between ads and editors, which angers advertisers. BuzzFeed, one of the leaders in the field, was founded by Jonah Peretti in 2006 with the promise to reliably produce content. BuzzFeed now generates 7 billion views from 200 million unique visitors per month. Advertisers rush to Buzzfeed because its ability to create sponsored content reaches a 30% -80% “going viral” chances. How does BuzzFeed achieve this level of independence? Jon Steinberg, former president of BuzzFeed, explains, “There is a lot of creativity [in content production], but the system takes over publish once the articles. We control during takeoff, but while it is in the air, it is on autopilot, driven by an algorithm. “The company effectively utilizes insights from the data that allow algorithms to feed the winners and to starve the losers.
These examples have one thing in common: Knowledge from the data comes from focusing the laser on a problem rather than shooting in the dark in the hope of discovering a hidden truth. Indeed, there are situations in which detailed information recognize data patterns of an opportunity, but most of the benefits from data come from pursuing well-defined problems.