Archives for posts with tag: data

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The Internet is great. If you like data, the Internet is perfect for you. You can easily get overwhelmed by stats, not understanding the metrics that really matter. All this data is worthless unless you count the numbers that really make a difference.

The Internet is enormous – you can achieve scale rather quickly and fairly easy. As easy as you might make the mistake to chase volume over meaning. If you want to attract a quality audience should you try to use every SEO trick in the book or facilitate an engaged community? If you want to make money with your site, should you deploy many slide shows and photo galleries with low value or engage through high value content?

People love to do stuff on the Internet. The best metrics are often those that relate to people doing what the Internet is best at – interacting. Unfortunately, humans are extremely complex, so the way in which we measure it can be over-simplified. Just look at click-through rates. The average is now 0.1% or lower. You could say that out of 1,000 impressions served, at least 1 person was clicking. Buy gazillions of impressions and you can get thousands of people to click. Or, you could say that 0.1% means, 99.9% of people didn’t care about ad and your work is an utter failure.

Some say banner ads don’t work at all. Or they are not working hard enough. Putting them in the right context makes sense, making them bigger and more intrusive definitely not. They should be more useful and relevant. When I see an ad that tells me the Hollywood Bowl will start individual ticket sales tomorrow at 10am, that would be useful. Good targeting works fairly well. Still, we are in danger of attributing everything to the last click, and very little to any other form of effect, or to any brand-influence or other communications the customer may have been exposed to. We tried solve that attribution challenge, the pace is too slow for my taste. Too many digital campaigns are measured on soft and unimportant metrics. It is not all about the click, and the last click is certainly not everything.

So, next time you report on campaign numbers, don’t go for the shiny number. Data tells a complex story. My guess is, you’re stopping at page three. Dig deeper.

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The next Albert Einstein has been born already.

He made a leap of thought that no one could have predicted. The leap took years of work, hours of discussions and collaboration, thousands of miles of travel. When he started the journey, he had no idea he was getting ready for a new idea of such magnitude.

The relativity theory was not deductible simply from the observations he’d made. Einstein’s work changed the world because it raced through the twentieth-century network of scientists, and then of writers, and then throughout the networks we call culture and history.

We can expect that the next Einstein is more likely to be a data wonk than an absent-minded professor. New software will correlate unrelated data sets and develop insights, theories and open new worlds to us. These program will make us rethink our thinking. The next Einstein will make sense of data that a program has uncomprehendingly flagged as interestingly anomalous.

The next Einstein is like to do her work in the public space, on the connected Web. Rather than waiting to publish final results, she will post early results and perhaps a speculative hypothesis. As word spreads, a web of links and connections will grow around her. Some nodes will turn into hubs, some hosted by amateurs others by professionals, scientists, businesspeople or scholars. We know, however, that many of the nodes and the threads that connect them will disagree, will argue, will go down a dead end, will be wrong, childish and selfish, will be a waste of the links that connects them. Still, we will be able to follow how an idea spreads and the effect it has as the competent and the nutty take it up, make it their own and pass it on.

This is not just a change of tools. The nature of the knowledge that the next Einstein uncovers will be different from that produced by Albert Einstein almost 100 years ago. Our new knowledge does not consist of a careful set of works that have passed through a series of narrow gates. We once believed that knowledge was scarce, when in fact our shelves were just small. Our new knowledge is not even a set of works: it’s an infrastructure of connection. We now travel through abundance as knowingly as we can, always within a context and from a point of view, always connected with others, always with the amount of care we judge is required. Knowledge is now a network with the characteristics of the Web.

We can argue all day if the new knowledge will bring us closer to the truth. We can’t argue that networked knowledge brings us closer to the truth about knowledge.

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I was meeting with an advertising agency and one of the team members talked constantly about new insights. After we explored his insight, it seemed to me he was talking about an observation not an insight.

I’ve seen the word on job descriptions, data aggregators claim to produce insights, clients request them and agencies claim to produce them.

The word ‘insight’ is a case of over-promising and under-delivering

One explanation for the insight inflation is organizational: The executives responsible for producing insights are often located in the research and data aggregation department, trying to find small gems that may affect marketing. This can be on the client side or done through planners in the agency.  The other reason is that people believe everybody can observe but not many can be insightful

So, what’s the difference between an observation versus an insight?

Determining that new homeowners are more likely to buy a new car is an observation.

Understanding that putting snacks at the checkout register will increase sales dramatically because parents want to calm down/reward their kids is an observation.

According to Dictionary.com, an insight is an instance of apprehending the true nature of a thing, especially through intuitive understanding. I’ve been working in advertising for more than 15 years and I haven’t encountered many insights. I don’t mind it because I’d rather reserve light bulb moments for science.

I worked with a global airline the last two years and they wanted to understand why they had problems attracting business class customers. We looked through all the data, did focus groups, interview prospects one-on-one. We had many observations and no insights. The breakthrough came when we observed passengers in the business class lounge. They were more concerned getting to the lounge than getting to the final destination. Once you’re in the lounge, you’re in the luxury bubble that protects you until you pick up your luggage. This observation led to an insight: If you can extend the luxury bubble from the usual airport to airport to home to hotel, business class passengers will be more willing to buy your product.

Observations are rooted in data. Insights are rooted in outside sources.

Insight is rare ,“apprehending the true nature of a thing”, since we often have to find a different way of expressing similar ideas to the competition. What’s the difference between Chase and Wells Fargo? Toyota and Honda? Goodyear and Pirelli? There’s no insight that can make a difference, the solution lies in how you say things, the advertising idea. Trust me, a lot of brilliant people try to find insights for these brands and markets, they are just as rare as hitting the $800 million jackpot.

There are some extremely rare planners and creative’s out there, hitting the jackpot once in a blue moon. Millions wait for jackpots, just to end up a few bucks poorer. Maybe it’s time to elevate the importance of observations. A great novelist makes a living with observations, stand-up comedians do. Just like observations bring a brand to life.

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Remember the Jetsons? The idea that robots and machines would do all the work for you while you can enjoy your life? Walking around the grounds of SXSW, one begins to think that something went awfully wrong. The machines are not here to serve us anymore, we’re serving and working for the machines. We’ve become slaves to the machines. The obsessive trap of compulsive loop systems like Email and Twitter keeps us busy engaging with the machines while we spend less time engaging with real-life humans.

Noisy technology has made us less human, less focused, less engaged with real people, problems and challenges.

Calm technology will get out of the way, let us live our lives as humans, unobstructed by technology and the need to push buttons all day. With calm technology, actions become buttons; invisible interfaces trigger interactions. Calm technology is just there, it works but it doesn’t require you to be glued to a device.

Just imagine: You geofenced multiple locations that you pass by each and every day. (Geofencing enables your actions to serve as buttons by creating persistent background locations that quietly track your every move.) While you leave the house, all unnecessary electronic items and lights will be switched off immediately. Since your work is only 10 minutes away, the geofence triggers the coffee machine to start up at your office and the computer to be turned on and ready for your arrival. (This example comes from Amber Case’s keynote at SXSW.)

It gets much deeper than that.

Imagine a device that records everything you do. It registers all the music you listen to, tracks each and every moment, knows who you interacted with, records when you work out and how intense, tracks your sleeping patterns, your food consumption, the quality of air you breathe – basically it tracks anything you do and encounter.

You already have that device in the palm of your hand most of the day. All above sounds a bit creepy because you’re afraid to share of the information with a third party. What are they going to do with that data? Increase your health insurance premium because you stopped at a burger joint once a week, didn’t work out enough and lived in smoggy conditions for 60 days a year? The scenario loses its creepiness when third parties don’t have access to it because you own the data. You control who has access to it.

How valuable would it be for your physicians to be able to access all your health data and provide you with better remedies to improve your health?

How fascinating would it be to explore your real-life social graph and encounters, the ones that’s tracked by your smartphone?

What amazing insights could we gather from all of our consumption habits and how to change them over time?

The majority of the data is already being collected. We don’t have access to it, private vertical silos do. Once we take real ownership of this data, we can really put that data to use. Currently, we create all this data to get incrementally more relevant advertising. Nice to have but nothing that changes my life dramatically. What will change lives is gathering this data in the background and putting it to important use: Health, Work, Entertainment, Education – you name it. That’s the revolutionary idea of VRM.

The future is not about being chained to the machines, feeding their insatiable appetite for data. The future is about integrating technology to improve lives, making our world a better place. That was always the idea, wasn’t it?

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SXSW is overwhelming madness, as usual. I had 15 meetings already, more than 10 to go. It’s easy to google the person in advance or check their profiles.

The problem is, we tend to pretend to know others based on public information. What we share on social profiles is not really meant to be a real representation of ourselves. When you use the tools to create closeness and familiarity with the other person, you cheat just a little bit and try to trick your way into their emotional self.

It’s a common technique, used by traditional direct marketers. You offer a product/service based on previous purchases. Direct Marketers track the success diligently and optimize based on performance. When digital marketing took off, marketers tried to copy that direct response technique. Unfortunately, they were not as disciplined as their traditional counterparts and made bad assumptions.

You look at outdoor sports sites, let’s send you an email with a background featuring the great outdoors.

You visit a site for car enthusiasts and you’ll be considered one of them until the end of time. (Or until you delete your cookie.)

In real life, it’s often better to start a conversation without assuming anything, just being curious and open. In the digital marketing world, many digital campaigns don’t succeed because they are based on false assumptions.

If you want to be successful, you need to be sure that your assumptions are right. Or you better start out with a blank slate.

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“(In the publishing business) the readers are the product, and the customers are the advertisers.” – Dave Winer

It started with Path last week, and now we learned that Facebook, Twitter, Foursquare, Instagram, Foodspotting, Yelp, and Gowalla all either upload your contacts’ phone numbers or email addresses to their servers for matching purposes.

As the post on Venturebeat states:

“Some of these applications perform this action without first requesting permission or informing you how long they plan to store this data. Foodspotting is the worst of the bunch, as it appears to transmit your data over an unencrypted HTTP connection (in plain text), making it even easier for mischievous parties to intercept.”

It’s a sign of a major problem.

Tulip Mania. Railway Mania. Poseidon Bubble. Japanese asset price bubble. Dot-com bubble. Rice bubble. Housing bubble. Bubbles after bubbles. After the housing bubble, one would think we’d have enough of bubbles for a long time to come. Think again.

The dot-com crash had nothing to do with technology. It had everything to do with the business model used to pay for the technology, which was primarily either display advertising revenue or VC money advanced with the expectations of returns based on display advertising. Display Advertising was trackable, it would be more effective online than offline. The bubble burst, crazy valuations went away and the digital ad market boomed. Ad Networks, DSP’s and exchanged drove down the value of ad impressions. CPM’s went from $100 for premier placements to $10. And impression junk was and is still anywhere. Suddenly, new businesses that relied on advertising revenue to support their model had to pivot.

Welcome to the age of user data.

Massive assumptions are now being made based on revenue generated (or soon to be generated) by personally targeted advertising drawing on user data. Facebook has a business model but their valuation is based on future realization of user data. Twitter doesn’t have a sustainable business model yet but it’s worth billions of dollars.

Often, companies don’t even know what to do with this data, they just have it because one day it will rain gold. You can’t open your computer without reading of the promises of Big Data. Your user data, goes the theory, allows ads to be specifically targeted to you. Should you buy a big bag of dog food, you will likely receive more ads for dog products, sometimes coupons. You’ll be grouped in a segment with other “dog food buyers”, your age and location will be determined, and a data model of you will be developed. A very simplistic one-dimensional model of you is living in some data warehouse and that’s why you encounter all those online ads.

The problem is not with the use of data to make decisions – the problem is with the simplistic one-dimensional use of data to make decisions. And the other problem with this assumption is that it believes in the rational consumers. Targeted advertising draws on the idea of our observed behavior presenting a coherent and realistic picture of our desires and needs.

It doesn’t.

My spending behavior in 2010 bears no relation to my spending currently or in the future – economies change, circumstances change, tastes change, opportunities change. More importantly, we are social beings, not rational beings. We are more driven by emotions and our clique than anything you can find in our brains.

As we know, targeting works on a limited scale. It does lift metrics, it improves performance. But the user data dream that one day all served ads will be relevant and lead to immediate conversion is just that: a dream. I’m not trying to minimize the opportunities at the intersection of data and human behavior, as explained in “How companies learn your secrets.” from the NY Times. I just don’t believe the way to collect and use data right now will lead to a pot of gold.

Tulips have value. Houses have value. Data has value. But the value is not as high as people tend to estimate while the user data bubble is expanding. It’s highly questionable if even a small part of these valuations can be realized. At least, I haven’t see any evidence of that, yet.

Nobody wants to hear things like that, when everybody is enjoying the user data ride. Just like nobody wanted to listen to Nouriel Roubini when he predicted the financial crisis. Nassim Taleb the “Black Swan”. Or Dave Winer the end of the data bubble. But something is wrong here, very wrong.

VCs spend billions of dollars investing in companies based on the user data model. They even tell kids to leave college early to participate in the gold rush. “You can be the next Mark Zuckerberg.”

They fund companies that need our personal data to succeed, just like the mortgage bundlers needed the junk mortgages to create fictitious AAA ratings. One day, when reality sets in and the fundamentals don’t add up anymore, the bubble will burst. A lot of money will be lost. A lot of people will be hurt.

Out of the ashes, new companies will spring up that have realistic expectations about the value of user data. And, who knows, even give us control over the data. Now, that’s valuable. Correct, Doc Searls?


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Facebook didn’t make it that big based on data. They became the Social Marketing goliath because of faith.

Your wife didn’t marry you based on data. She married you based on faith.

Obama didn’t get elected on data. He got elected on faith.

More data is not a good thing. More data eliminates faith.

Without faith, you’ll never make that quantum leap. You’ll never run for office, create a movement or a company that changes the world. People don’t flock to spreadsheets, they flock to people with faith.

Once the spreadsheet runs your decision-making process, you’re doomed. Bean counters will always find a reason to shoot your idea down. Vision based on data feels cold, almost inhuman.

People want a human, emotional connection. It warms them from the inside, it makes them feel cozy and loved.

People want faith.

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Just like many of you, most of my digital life exists in the cloud. Gmail, Facebook, Twitter, Pandora, Goodreads – you name it. It’s so convenient, it frees me from owning any equipment or learning something as scary as running my own server.

Lately, I’ve been having doubts about this decision.

While many of us discuss the wisdom of sharing data with advertisers (and the questionable benefits for advertisers), recent reports make me wonder if that’s not just a side show. In the good old days, when somebody wanted to get access to any information in my possession, they had to subponae me personally. In this new brave world of cloud computing, they don’t bother with me. They go directly to the companies I’m storing my information with. (And, once in a while, they do the right thing.)More often than not, these companies don’t even inform me of this legal action and share information based on their needs. Not on mine.

Terms of Service protect the company. And keep me vulnerable.

Nobody ever read the “Terms of Service’ of any platform we’re using each and every day. The latest Apple update was more than 50 pages long. Who bothers with that? We’d rather click the “Agree” button and get excited about the newest feature update. That’s human nature. But, when pushing that button we basically give companies the power to share our data based on their ethical standards and the demands of VC’s and Wall Street.

Look, most of us have nothing to fear. We just want to live our lives, make the world a better place and enjoy the time we have left on this earth. But, we should never forget the famous quote from Pastor Martin Niemoeller:

“They came first for the Communists,
and I didn’t speak up because I wasn’t a Communist.

Then they came for the trade unionists,
and I didn’t speak up because I wasn’t a trade unionist.

Then they came for the Jews,
and I didn’t speak up because I wasn’t a Jew.

Then they came for me
and by that time no one was left to speak up”

There are only two solutions to this problem:

  1. We trust our data to a company that creates a cloud server that protects the rights of the users who store data on it. (Problem is, why would I trust this specific company? What track record would they need to gain mass adoption?)
  2. We own our own data. Just like we own our printed documents. Our diaries. Our thoughts.

I don’t know about you: I vote for the latter.

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This column appeared first on Jack Myers’ MediaBizBloggers site

Kirk McDonald, President, Digital, Time Inc. keynoted at the iMedia Agency Summit in sunny Phoenix and predicted the next decade will be the age of storytelling.

Why?

The pendulum that swings between art and science in advertising has moved too far to the science part of advertising in the past decade. We have focused on making markets more efficient and not focus enough on moving markets. While there’s a good case to be made to introduce algorithms into advertising, we have gone too far. We forgot that advertising is about people with lives and soul and energy, and we have to re-focus our efforts on developing creative ideas and innovation in advertising to make meaningful connections with people. While a good delivery mechanism is vital to deliver relevant messages to people, we have to put as much (or even more energy) in crafting messages that connect more with the heart and soul of people.

We have to stop the race to the bottom

While his message is clearly self-serving (publishers can’t live on CPM rates of $0.23), it still rings very true. For years, the digital marketing community has been engaged in a race to the bottom. The problem when you race to the bottom: The winner is still at the bottom. For the advertising community to find its footing again, we need to reverse that trend and race to the top again. Connect with the heart and soul of people. Tell stories they want to share. Tell stories that inspire them. Listen to the stories of people and share them with the world. New tools and platforms allow advertisers to co-create and collaborate with people. This is a unique opportunity. The industry is at crossroads: It is our responsibility to stay away from the pull of short-term gains and focus on the long-term health of the advertising industry. And regain its soul again.