BrainTrust Query: Is the Era of One-to-One Communication Finally Upon Us?
As the web has evolved, Amazon has changed the way people think about shopping. Google has changed the way people think about information. And Facebook has changed the way people think about themselves and each other. These changes, affecting many areas of society and business, have been quite dramatic, bearing implications for how companies view data, use social media and engage in marketing.
Earlier this week at the Shopper Insights in Action Conference in Chicago, Andreas Weigend from the Social Data Lab at Stanford University and former chief scientist at Amazon, talked about the "Social Data Revolution," emphasizing the step-by-step progress in communication over the decades.
A century ago, Mr. Weigend points out, consumers and shopkeepers knew each other personally. Then came the era of mass-produced products and mass, one-way communication. In this environment, segmentation of consumers became critical. For example, it was very expensive for Sears to create its catalogs so the company had an incentive to segment its audience, sending the right catalog to the right consumers.
But in today's market, Amazon, Google and Facebook have moved beyond segmentation. With peer-to-peer communication occurring on many devices in real time, there is no longer a need for segmented groups. The data created when people click, search, and share information makes it possible to know who consumers are, what they like, and with whom they interact. This data can be considered "digital exhaust". The analyst's job is to create a mindset for turning this mess into meaning.
For example, examining the clicks and purchases of thousands of consumers helps Amazon understand how they approach the purchase funnel so recommendations can be made to others. This, Mr. Weigend says, is implicit data.
When consumers create reviews or wish lists, this information can be used to help others make decisions. It also empowers people to say what they think. This is explicit data.
Ambient data is related to the situation or a specific location, helping to determine whether it is the right time to engage a shopper in a conversation. Amazon is very early in the process of figuring out how to use ambient data.
It used to be that algorithms were important since data was limited and we had to identify patterns — such as traffic models — to predict what people might do. Now there is real time data so you can look to see how the traffic is actually moving. Economics used assumptions to determine what people might buy. Now you know what people buy in real time.
In this new marketplace, companies can shift through the digital exhaust to understand what their customers do, what they like, what they talk about, with whom they talk, and how often. Then marketing can move closer to one-to-one communication.