“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Tom Manvydas, vice president of integrated marketing services at Experian Marketing Services.
Whether by intent or not, big data is improving the quality of life on an unprecedented global scale. In recent years, we have seen data move beyond enabling more convenient and valuable digital experiences to fueling our national and global economy.
Since 2007, data-related products and services have generated about 30% of real personal consumption growth, according to the Progressive Policy Institute (PDF). Big data also is being used to solve society’s biggest challenges, including famine, disease and poverty. Big data could yield benefits for health care alone of more than $300 billion annually, McKinsey estimates. As the data-driven economy expands, these estimates do not come close to recognizing the actual long-term potential in terms of its value.
We often overlook or downplay the fact that it isn’t the data that drives innovation – it is our ability to use it. Turning big data into a meaningful application is the catalyst for this new economic force. As such, we need to recognize the origins of that value: Advertising and marketing act as a critical breeding ground in big data’s innovation chain.
Big data innovation has its roots in marketing for two reasons: consumer engagement and marketing efficiency.
Marketing engages with a broad section of the population at a scale and frequency that is unmatched. Marketing and brands are embedded in our culture, constantly engaging with consumers across a wide variety of ad-supported services and media. This broad-based consumer engagement is a big data production house. The ubiquitous nature of consumer engagement data has propelled marketing into the midst of a major growth spurt, bringing media and technology companies closer together, forming a hybrid industry with a common goal of enhancing the digital experience of the consumer.
There is big money behind this big data innovation in marketing. The drive to better monetize that broad-based engagement, whether it’s a valuable mobile experience or relevant TV advertising, has significant financial implications.
Companies such as Amazon, Google or Facebook have an economic interest in seeking solutions to enhance our digital experiences. Developing the world’s best algorithm for discovery online, social connections or shopping is all about economics.
Because of the massive financial opportunity, marketing has benefitted from a highly nimble and remarkably explosive startup culture. Marketing dollars fund some of the world’s best data scientists, quantum physicists and robotics engineers. They are inventing and innovating in self-driving cars, health trackers and sharing economy services. These technologies eventually make their way to other industries. FitBit, for instance, is a first-generation health monitoring application whose technology will soon allow users to map their healthcare data against thousands or millions of people just like them. This information could potentially have significant value by identifying health-related issues before they become a big problem.
Bigger Bottom Lines
In addition to being good for society, creating customer value can drive revenue. Companies that use data to put the consumer at the center of their innovations win in the digital economy. For example, Google and Facebook have often bested competitors because they did a better job of balancing user value against financial success.
Of course, there are issues around transparency and consumers’ understanding of privacy policies, but I believe there is also far more value in big data for consumers and society than many people realize. “The ‘plumbing’ of the data-driven economy, the part that sits out of sight behind the drywall, out of the view of most consumers, is something consumers are just seeing for the first time,” one of my colleagues said recently. If we objectively quantify the value vs. the risks, we see that consumers and society gain significant value from big data applications. But consumers need be included in the conversation and know why.
We are at a pivotal point in the debate on where to draw the line between “good big data” and “bad big data.” We must constantly weigh the value of big data against our concerns. There may be a certain peace of mind, for example, that comes with comparing people’s health statistics to others to help doctors evaluate their conditions with real data, not just intuition.
The good in big data is too precious for society not to take full advantage of its potential application in our advancing world. The real focus of this conversation needs to be on respecting the power of big data, not fearing it, and collectively protecting the environment that produces that innovation.