We’ve all heard about the controversial topic of big data. Big data allows companies to discover highly coveted, specific information about their audience’s behavioral patterns and personal preferences over an extended period of time. This invaluable information will completely expand the horizons of a company, providing insight into what audience its product or service attracts. Big data sounds incredible, right? Well...
Big Data’s Bad Rap
Imagine this: It’s 2035. That cute puppy picture you posted didn’t draw as much engagement as you expected. Your social score plummets. Now, you are in fear of losing your social status in a world that considers internet “fame” paramount to success.
Sounds ridiculous, doesn’t it? Unfortunately, there’s some truth to this scenario, and China’s social credit system is on its way to paralleling the plot of a Black Mirror episode. The system mimics a credit score in most senses, except it’s not your knack for paying credit card balances on time that determines a good score. It’s your exemplary behavior, which indicates strong loyalty to the government. Scores take a hit from simple infractions like smoking in a non-smoking area or buying too many video games, resulting in social restrictions.
China’s social credit system is made possible because of big data. The government uses citizens’ consumer preferences to track their behavior. Naturally, many have questioned the ethics of big data. Luckily, US companies positively use big data to create mutually beneficial consumer and company relationships.
Case Study: Amazon’s use of big data
As Amazon is a company offering a wide variety of products and services, figuring out what products interest certain customers is tricky. The company uses big data to recommend relevant products to customers based on their searches and previous purchases. Amazon’s technology is based on collaborative filtering, the process of building each individual a profile based on past searches, shipping addresses, and whether a customer gives feedback or writes reviews. These profiles help determine which products or services customers want.
Example of an Amazon Profile:
- Female, employed, aged 21 to 35
- Living in a rented apartment with income over $40,000 (thank you, shipping address)
- Enjoys photography because she searched for polaroid film
Other Ways to Gather Data
1. Location Services
Location services on mobile devices allow apps and websites to use information from cellular, Wi-Fi, GPS networks, and Bluetooth to establish an approximate location. This information can be sold to various companies to help advertisers determine who is potentially interested in their products. How could this information possibly further an advertiser’s agenda?
Michelle Doe’s Day:
- 7:45 am: drops kids off at Catholic elementary school
- 8:30 am: goes to a local coffee shop
- 9:00 am: drives to work at a law firm downtown
- 1:45 pm: goes to lunch somewhere close to her office (mostly small, Mexican restaurant)
- 3:30 pm: picks up children from elementary school
- 4:00 pm: goes to the gym, runs occasional errands close to her house (grocery store, bank, gas station
Information Gathered from Michelle’s Location Services:
- Enjoys coffee
- Works as a lawyer or for a lawyer
- Likes Mexican food
- Works part-time
- Enjoys working out/fitness
- Owns a car – which she needs to fill up with gas
This information creates many advertising opportunities because there is concrete evidence of things Michelle Doe prioritizes. Advertisers can tell what she is interested in as a consumer and what matters to her at a basic level, based on her daily routine. By turning her location services on – whether she knows this or not – she has given advertisers the ability to track her and to target specific ads to her.
2. Targeted Programmatic Advertising
Targeted programmatic advertising entails using software to buy digital advertising targeted to a specific audience or demographic. This is an ever-growing advertising strategy, which accounted for 28% of digital media spend in 2018. Brands who use targeted programmatic advertising have greater marketing ROI because they can effectively reach their audiences.
Therefore, for companies to successfully utilize their data, they should target ads to specific people – based on their daily habits, consumer preferences, and behavioral patterns – in a responsible manner.
Being Responsible with Big Data
Big data is a double-edged sword. It drastically helps companies target distinct audiences to efficiently market their products, but if it falls into the wrong hands, the world can transform into a very scary reality. Don’t fret, there are a few ways that companies can use big data responsibly.
- Shift company mindset: Companies must be mindful of how they use customers’ information. The top priority should be building trustworthiness in the minds of their customers. If this trust is betrayed, customers will stop using the company, and all that data goes to waste because there are no customers will be left to market.
- Utilize privacy technology: Taking away a single point of ownership of any given data is a suggestion for how to keep companies honest when buying and selling data. Companies can’t buy and sell data if there’s a system in place to take away ownership of that data.
- Be honest: Companies should communicate with their customers that in exchange for using a company’s free service, customers give away some of their personal information. Most people do not have a problem with this notion, but when the majority of customers do not know that their information is being used to boost a company’s sales, they do not feel at ease.
Ultimately, customers benefit from companies’ use of big data because advertisements are better tailored to their wants and needs. Additionally, big data allows companies to effectively gather feedback to improve customer service interactions. This data can also help companies innovate exciting products that their customers want. Knowing more about customers fuels business, and the responsible use of big data helps both companies and consumers.
Data Powers Companies
It provides the ability to expand a company’s audience, which is always a priority, because more people mean more revenue. Never disregard data, because, with the right set of data, a company can accomplish practically anything!