The normal distribution – beautiful curve and rules statistics and data
Big data, small data, personal data, data infrastructure, data here, data there: I generally hate buzz word bingo. But for a change, I actually believe in the impact of data and clearly we have more data at our disposal than ever before. Question is: how can we use it in new ways to create new businesses? We looked for some answers at The Hive chatting with T.M. Ravi.
According to Ravi all companies and all parts of a company will be transformed by the use of data. What we see today is just the first step for building data driven businesses: companies like Google, Facebook, Twitter or LinkedIn mostly just built a powerful infrastructure to collect data in the digital space. Actually these companies have built almost addictive platforms to let us, its users, give them all the data they might dream of. The next step however is how we collect and use data from the analog world. Google is doing so with StreetView, but think about pretty much any object being connected to the Internet and collecting data or being a data object in itself. All any company then needs to master is processing data and sucking the value out that lies in it.
Wining and dining the advertisers in the old Mad Men way won’t do it: Embrace change and new technologies like real time bidding, behavioral targeting and performance marketing – we are just at the beginning of the data revolution.
In a field nearer to my home turf this is already having a huge impact: online advertising. This industry is totally driven by data today and the value lies in targeting and personalization of advertising. For example during a real time bidding process on an ad impression the machines involved can estimate how much to bid by using personal or behavioral data about the user. If you don’t use this technology, you’re being out-bid by the smarter machine – or, from the publisher’s point of view, you won’t be able to get the best price for your ad inventory, if you don’t provide data about your users.
That is a huge challenge to our traditional business of selling high-CPM brand advertising. In the words of Ravi: “brand advertising is getting squeezed by performance advertising, because performance can be measured very well.” And what do marketing executives love? A measurable ROI in terms of sales and not some fuzzy brand awareness or other rather soft measure.
What to do? Wining and dining the advertisers in the Mad Men way won’t do it: Embrace change and new technologies like real time bidding, behavioral targeting and performance marketing – we are just at the beginning of the data revolution.
— Still digesting insights from my Silicon Valley trip… This one is related to this post (in german).
