“They promised us jet packs…” begins a classic complaint about the future, when the awesome promise of a technology isn’t realized. Today, this is true of Big Data in business. The ability to capture and act on previously unimaginable quantities of data should be creating breakthrough new products and services. We’re still waiting for the jet packs.
Consider where Big Data makes the biggest impact right now. The Sloan Digital Sky Service is mapping and analyzing the heavens at a rate of 200GB of images a night. The power to sequence a person’s DNA code is creating a new world of cancer therapies. But in business: how about sending supermarket shoppers a more targeted coupon?
What’s happening is that businesses are using the great advances in data to carry out existing tasks more efficiently. McKinsey forecasts a $3 trillion economic value from businesses making better use of data, highlighting areas such as where to drill for oil, how to lay out a supermarket and when to transport freight. In other words, doing the same job better.
The picture is the same in marketing. Those terabytes of data on human behavior are helping media agencies and ad tech firms to serve display advertising more efficiently, and to target people based on their recent web searches and site visits. British supermarket Tesco even bought Dun & Bradstreet, the company that ran its customer loyalty program, as the store sought to perfect the targeting of its special offers. It’s applying engineering principles to interrupting people. Accenture’s Glenn Hartman made this clear in an Ad Age interview about Accenture’s entry into the marketing services business. Asked about Old Spice’s wildly successful and none-too-rational advertising, Hartman said: “The Old Spice campaign was a wildly expensive manual execution. When you ask, ‘how do you do that at scale on an ongoing basis?’ the room gets quiet.” This is a vision for big data where automation beats imagination.
The opportunity for big data is not to tighten existing business; it’s to grow new business.
In The Innovator’s DNA, Clayton Christensen suggests that a talent for association explains some of the success of inventive firms like Amazon and Google. They have a gift for drawing new connections between different data points. So huge volumes of data and new processing power should spawn ideas for new businesses.
The entertainment industry is in on the act, too. Data from Netflix’s 27 million U.S. customers showed viewers stayed to the end with movies directed by David Fincher or starring Kevin Spacey, and that British drama “House Of Cards”was still popular 20 years after its original release. Triangulating those data points led to a remake that is now the most streamed piece of content in 40 countries. Iron Maiden now organizes self-financed world tours, plotting tour destinations around the cities where the band’s searches and downloads peak.
The finance industry shows the untapped potential. According to online bank simple.com, every credit card transaction generates 120 fields of data: what time it took place, where you were, what cashier you bought from, what else you bought. And yet, the only field your bank cares about is whether you have the money to pay for the items you want. That leaves 119 fields that could inspire new services and experiences. It just needs entrepreneurially minded bankers to do something with it.
Responsibility for the next wave of Big Data innovation will cross company functions. The new star team will take a mix of marketers who “get” data, IT executives who see the commercial potential in the data they gather, and finance executives who look for top-line revenue growth. The mindset of this new group won’t be entirely technical. It needs to be lateral and empathetic, spotting the human truths behind the behavior patterns, and project them into a business opportunity. Ideally, the next wave Big Data executive will be more Nate Silver than Sheldon Cooper.
With delicious irony, the best case for applying Big Data to innovation instead of communication comes from a media company’s own Big Data work. AOL recently published Buying At Speed, a study of over 20,000 online shopping journeys. It found that people browse brands every day. They pick up cues from their actions, and therefore make up their minds about the brands they prefer before the conscious online shopping process begins. By the time the data-directed online advertising kicks in, the majority of shoppers already know what they’d like to buy. Better to invest in innovations that can move everyone, than spend on refining a campaign that misses most people. And that’s the opportunity. Big Data is higher-octane fuel for innovation than rationalization. If data is the new oil, using Big Data just to tighten up your existing business is like using kerosene to replace whale oil lamps.
This article was written by Valley Voices from Forbes and was legally licensed through the NewsCred publisher network.