Let me introduce the Berserker. Yes, its mysterious and kind of disconcerting. It has two words, two numbers and one little decimal
point, and it is analytics 2.0
I’m
sure you have heard on the grapevine about big data, the proliferation of structured and unstructured data in organizations. Analytics 2.0 use the
power of data to make informed decisions and in this case, marketing. Before we continue, lets clear up some terms.
So what is 1.0?
Take the same scenario, but let us say our Adventure Park website has a page where guest can write reviews. You decide to pop in to the reviews page right before you complete your purchase only to realize there are many complains about long waiting time. So you decide to drop the idea altogether. With analytics 2.0 our Park realize that you have visited the reviews page right before you decided to drop the purchase. Few hours later, out of the bloom you get an email from our Park explaining all about a rapid pass that lets you move through the lines faster. Now you have a reason to reconsider visiting the Adventure Park. Analytics 2.0 allow companies to understand consumer's journey to make a purchase.
Checkout this Google Analytics YouTube ad that explains Analytics 2.0 in a online checkout context.
So what is 1.0?
Let me give you ah hypothetical example. I’m sure you have answered the infamous “Tell us how you heard about us?” question at least once in your lifetime. This is a common method organizations use to evaluate which advertising medium was most effective. It sounds perfectly fine until you realize many advertising mediums cross paths.
Lets take a simple scenario; let’s say you saw a poster for the Boston adventure park in the subway station. Once you get on the subway and flip open the newspaper you notice the same ad flashed across your newspaper. While thinking about what to do over the weekend, you decide to checkout our Park’s website, and end up buying passes for this weekend. While you are waiting in the line to pick up your passes on one sunny weekend, they ask “Where did you hear about us?” I bet you did not ponder on that question for too long. Most advertising mediums cross paths, and figuring out how to allocate the marketing dollar in the most effective combinations can be a tricky question.
Upgrade to 2.0
Checkout this Google Analytics YouTube ad that explains Analytics 2.0 in a online checkout context.
New Tech New Questions
Large companies already have about 200 terabytes of stored data about their consumers. That is about twenty
times the printed collection in the library of Congress. Though, making a useful information out of data is not as simple.
Just like when you have bought new software, new comes with set of its own new questions. For starters, there are number of techniques derived from statistics and computer science to convert data into actionable information. However, statistics has its limits. Such as how to weed out the random noise or micro behavior to recognize larger trends? Second, how can companies create enough touch points through social media or other web related content during the customers' journey to make a purchase?
Just like when you have bought new software, new comes with set of its own new questions. For starters, there are number of techniques derived from statistics and computer science to convert data into actionable information. However, statistics has its limits. Such as how to weed out the random noise or micro behavior to recognize larger trends? Second, how can companies create enough touch points through social media or other web related content during the customers' journey to make a purchase?
Additionally, the finance department’s standpoint, how can you justify the Facebook “Likes” as an return on investment?
In Conclusion
Analytics 2.0 will undoubtedly press on its potential. According to McKinsy Global institute, big data has the potential to increase the retailer margins by 60%, which prompt companies such as Amazon to spend twice as much as their retail counterparts on analytics. According to the Economist, IT industry have invested 15 billion to acquire companies that specialize in big data, and global data generation is expected to grow at 40% per year.
In Conclusion
Analytics 2.0 will undoubtedly press on its potential. According to McKinsy Global institute, big data has the potential to increase the retailer margins by 60%, which prompt companies such as Amazon to spend twice as much as their retail counterparts on analytics. According to the Economist, IT industry have invested 15 billion to acquire companies that specialize in big data, and global data generation is expected to grow at 40% per year.
So, what do you think? Would you be concerned of your privacy and how brands can use your online behavior or do you think this is an opportunity to let brands know what you want from them?
I find these techniques somewhat disturbing, but primarily from a privacy standpoint. While I would certainly rather have highly targeted marketing--and indeed, that's one of the great things about, say, current Facebook advertising--there's something (read: a lot) wrong with the fact that none of us can have a moment's peace from being thought of as anything other than consumers. Where's our dignity gone?!
ReplyDeleteI hear ya! but target marketing annoys me more. If i look at a top on GAP website for few seconds, i get dozens of clothing store ads on the corner of my browser for weeks. it would be great for once if i can pick the type of ads i want to see. Hulu had something similar to that.
DeleteI still remember that on the first day I met you, you just discussed the big data with me. In my opinion, the new technology might helpful for the companies, however, as consumers, to some extent, I do not want my spending habits and behavior are shared by those companies. Because I believe those information will reveal my income and other personal details, and this may caused a lot of hidden danger.
ReplyDeleteLOL really... did I talk about analytics at a pizza event! well its not at all about spying on one person that would be a serious privacy issue and a lot of liability for a brand.
DeleteThe idea is, it use to be that companies said this is what we are selling, and said it through TV, radio, newspaper ads. Then people went and bought it. when companies want to know what people think about their product, they brought number of people in and asked them what they think of the product.
But now with social media and online store ratings etc. companies get to hear from anyone who want to share their reviews. lets say you bought a tent from L.L Beans and this particular product broke after you used it once. You can give a bad ranking for that product on their website. if there are a lot of bad ratings for that product, L.L Beans have to take the product off or sell it with a discount.
Hi Dushyanthi,
ReplyDeleteVery informative post, it does reinforce that we receive advertisements and marketing messages in multiple ways. I think web 2.0 can be a double edged sword. I personally always read the reviews on-line before making a purchase but do not like the idea of my browsing and spending habits shared by those companies.
I appreciate it and it is very very useful for me.and as well as youtube technical service users
ReplyDeleteThank you for the info. It has been very helpful to me.
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