Data is the new oil

 

‘Big Data’ looks like it’s going to be the business buzz word of 2014. Big Data refers to large data sets that can be managed and analysed only by increasingly powerful and sophisticated tools. Over the past five years, the world has witnessed an unprecedented explosion of digitised data, which is often referred to as “Big Data.”

• Data production will be 44 times greater in 2020 than it was in 2009
• Individuals create 70% of all data. Enterprises store 80%

Data is increasingly defining us; from the information we share on the web, to that collected by the numerous companies with whom we interact. It includes all of the information that we’re generating through our interaction with and over the Internet, everything from Facebook and Twitter to music downloads, movies and streaming. According to IBM, the digital universe will grow to eight zettabytes by 2015. Data generation is so significant that at the moment it far exceeds the ability to store, process, and make sense of it.  As a result, most of it is irrelevant ‘noise’. The challenge for business is develop systems that use more of it to generate usable information. More important than the sources is the ability to distinguish the signal from the noise. Marketers only derive real value from data when they use analysis to bring new products/services to market, understand which audiences to target, and optimise campaigns and their online presence.

Data has been called ‘the new oil’, because it offers a definitive source of competitive advantage across all industries and will offer significant future value. Data is being considered to be the future commodity.

Big Data is defined in many different ways. Microsoft defines Big Data as the process of applying serious computing power—the latest in machine learning and artificial intelligence—to massive and often highly complex sets of information. Industry leaders like the global analyst firm Gartner use phrases like “volume” (the amount of data), “velocity” (the speed of information generated and flowing into the enterprise) and “variety” (the kind of data available) to begin to frame the big data discussion.

Data on its own, however, is not insight. Without a business context a fact is just a fact, it is not an insight. For data to mean something it must be placed in the context of the marketplace. Organisations are spending an average of 21% of their marketing budget on analytics, but at present this is poorly coordinated and applied.

Marketing has always depended on data (such as market segmentation, panels and surveys), but its prominence has risen with new types (text, audio, video and image), new internal sources (digital lead capture, sales systems and Web analytics), and new external sources (social, behavioural and mobile).

 

 

 

 

 

 

 

 

 

 

 

Source: Syndacast

Forty-two percent of marketing data comes from external sources, including social networks, which points to the growing influence of relationships in marketing.
                                               Gartner’s Data-Driven Marketing Survey, 2013

Externally gathered data can be divided into two main categories: structured and unstructured, of which there are five main types:

• Created data such as market research surveys is “created” data because it wouldn’t exist unless some mechanism was in place to ask people questions and capture their answers.
• Provoked data is generated by giving people the opportunity to express their views. The most well-known are the online star ratings given online for products and services.
• Transacted data is generated every time we click on a website, buy something online, or check out at a cash register, and provides powerful data on buying behaviour.
• Compiled data is collected when we use name and address as common in any internet transaction.
• Experimental data is the result of designing experiments in which different customer reaction is recorded.

Unstructured data is where the real explosion in data quantity is happening. Unstructured data can be divided into: captured and user-generated.

• Captured data refers to information gathered passively from an individual’s behaviour, such as search terms you enter and the location data that your phone generates through its GPS. In these cases, you are not necessarily aware that you are generating information about yourself.
• User-generated data includes the videos posted on YouTube; the collaborative project files serviced by SharePoint; or the views expressed when someone comments on an article on a news media website, writes a blog entry, or posts an opinion on Twitter. Most user-generated data is not attributable to an individual.

Big Data – The Next Frontier of IT:

[youtuber youtube=’http://www.youtube.com/watch?v=Ow76L0IEZNY’]

 

IB Style questions

1. Define the following terms:

• target market
• competitive advantage

2. Explain why data can be thought of as ‘irrelevant noise’.

3. Analyse the effects of e-commerce on the marketing mix.

4. Evaluate the impact of social media on marketing techniques.