What is Big Data and how can it be applied for marketing?
It seems "Big Data" should be firmly on the agenda for business improvement according to all the major analyst firms. But what is Big Data? How does it differ from traditional data management and business intelligence?
In this post I summarise the view of three experts I talked to about "Big Data", asking how business can apply it.
What is the scope of big data?
Andy Mendelsohn, Senior VP of Database Server Technologies at Oracle.
One way to think about the scope of big data and how it fits in with previous data technologies is to consider the automobile industry, suggests Andy Mendelsohn. “Henry Ford invented the Model T 100 years ago,” he argues. “Today, Ford makes cars, and they have much better engines, and they have their full sensors and computer systems. But at the end of the day, they're still cars. Cars have evolved a lot over the last 100 years. Big Data should be thought of in the same way.
“Today, we have our information systems for business intelligence, and people call them data marts and data warehouses, and they're loaded with all this transactional information from our transaction processing systems like E-Business Suite and other application vendors. And that information is really valuable, the crown jewels of company, that transactional data. It's not going away.”
But Mendohlson argues that what makes Big Data different is the ability to capture new kinds of information to enhance and enrich the transactional data that they're currently using. “For example, if you're a retailer, you might want to go out to Facebook and pull out information from your customers' Facebook pages if they're willing to friend you,” he says. “Most of that information is completely worthless, right? All the pictures of babies and families and all that stuff. You don't want to keep that in your relational databases. But the fact that somebody actually had a baby is really interesting to a retailer, right? They can use that to upsell baby bottles and baby toys and everything else to baby.
“So what's really important about Big Data is to understand there's a lot of this data, most of it's completely worthless to the business, but there are these gems, these nuggets of information, like the fact a customer just had a baby. You want to take that information, you want to integrate it to your existing transactional data that you've got in your data warehouse and really use that to make better business decisions and make more money for your company.”
Big Data in the real-world - three examples of good practice
So that’s the theory. But does it resonate with customers in practice? Mendelsohn cites three examples of customer good practice that he says suggests that it does. The first is an insurance firm. “Insurance as an industry we all understand pretty well. We all have car insurance,” he states. “This particular customer already has an Exadata data warehouse, and they're already capturing all their transactional insurance information about their customers, their accidents, their policy information, et cetera.
“What they would like to do is enhance that data with a new kind of data that you can get from cars. Cars are now loaded with sensors that are capturing your every movement of what's going on out there and it's called car telematics data. What they would like to do is use that information to actually study the actual driving behaviour of their customers and use that to better understand maybe what their insurance rates should be, what their driving habits are and maybe even help customers be better drivers. This is actually a very classic-use case. So they're interested in augmenting their Exadata system with a BDA, Big Data Appliance."
The next customer is in the travel industry. “They run websites for customers who are looking at doing travel of various sorts,” explains Mendelsohn. “Today, of course, they're already capturing all the transactional data about their customers, what are the trips they're buying.
“What they would like to do is augment that information with what's going on in their websites. They want to capture the web logs, they want to get social media data to better understand what their customers are up to, what are the trips they're anticipating maybe going on and combine that information with their existing information about their customers' previous transactions and use that to help make better promotional offers to the customers and grow their business.”
The last customer is in this games space. “Gaming is becoming a huge industry,” says Mendelsohn. “This company is in the business of selling game consoles of various sorts and Internet games, and they already have a big Exadata data warehouse already that's analysing that information. They're looking to augmenting their Exadata data warehouse with a BDA, and they want to use it to what you might expect: better understand what the customers are doing out in the games.
“They want to understand relationships between customers. One of the really interesting things in games is that people play games with each other. And you want to understand the social networks of people who are playing with each other because it's likely that if one person in that network wants to do something, the others will want to do the same thing. So they can use that information to better upsell information in this game space.”
So overall, he concludes, there's a lot of interest in this space. “It's a real evolutionary technology,” he states. “Customers have their existing big BI information systems, their data warehouses, their data marts, and they're really excited about augmenting their transactional data with this Big Data to help them grow their business.”
Big Data = Big Dead End?
Alan Mitchell, strategy director of market analyst company Ctrl-Shift
‘Big Data’ seems well on its way to becoming the next big bandwagon. However, in the scheme of things I think it’s more like a Big Dead End.
First, we need to beware the hype. To take just one example, Big Data does not mean that now “anything can be predicted”. Yet that’s what one breathless book – Super Crunchers by Ian Ayres – claimed a few years ago. That sort of hype really isn’t helpful. More important, Big Data is actually just a case of ‘more of the same’. It fails to address the really big information challenges (and opportunities) that we now face.
Big Data is all about statistics: divining patterns and trends from large data sets. Statistics are incredibly powerful and useful for the way they challenge the assumptions and inferences naturally made by human minds – many of them faulty. As I said, that’s great.
But if we look at the really big value gap faced by society nowadays, it’s not the ability to crunch together vast amounts of data, but quite the opposite. It’s the challenge of information logistics: of how to get exactly the right information to, and from, the right people in the right formats at the right time.
No matter how big, exciting and impressive Big Data is, that’s one thing it cannot do because it is dealing with statistics, not specifics. Instead, all it really offers is more of the same: more data collection by the same entities leading to more data crunching. While the volumes of data now being generated may be unprecedented, Big Data is actually just a continuation of a very old trend, not something new.
The second ‘more of the same’ thing about Big Data is its organisation-centric assumptions. In many (though not all) of its manifestations, Big Data is actually customer data: data about customer behaviour. This is something that organisations collect about their customers in order to do something like offer them a product or send them a message. It’s all about helping organisations do more, more efficiently.
This is the Big Blindspot of organisation-centric thinking. It naturally assumes that all future improvement will come from helping the organisation do things better when, in fact, the biggest opportunities might lie elsewhere completely – in helping people as individuals to do things better via new types of person-centric service.
Helping people do things better locates the epicentre of new value creation outside the boundaries, and control, of the current organisational set-up. For many organisations (including those that are excited about Big Data) this doesn’t (yet) compute.
The third thing that’s small about Big Data is that, even with the vast amounts of data it deals in, it’s actually only skimming the surface of a deep sea of computation.
Big Data never goes to the source – the fountainhead of Really Big and Important Data: human beings and what they want to do right now, or plan to do in the future. Yet, thanks to all the technological revolutions that are going on right now, we are beginning to develop the ability to do just this. People are acquiring the ability to manage their own information, to input their own information and to share it with other people. This is creating an avalanche of Really Big and Important Data: Volunteered Personal Information – information about me, my priorities and circumstances and what I want to do right now.
VPI and its connection to information logistics is the Really really Big Data challenge facing our society right now. How to unleash the incredible riches of this massive data resource which, like the oil in the ground before the 20th century, has always been there but has remained inaccessible, out of reach, and untapped? This is not about data collection and crunching – it’s about data sharing, a completely different type of technology and infrastructure problem to the one addressed by Big Data.
The Big Data bandwagon is supposedly driven by ‘evidence’ – evidence that it delivers benefits yesterday’s ‘small data’ failed to deliver. Trouble is, it’s a misleading sort of evidence.If you want to get to the moon, you don’t climb mountains and build skyscrapers. You build rockets. A completely different activity.
Big Data is a massive investment in building skyscrapers. It’s well on its way to becoming organisations’ next big displacement activity – investing huge amounts of time, money, resources and effort not addressing the biggest, most important opportunity.Displacement activities of this sort are incredibly wasteful and damaging. By all means use big data sets for what they are good at – statistical analysis of trends. But don’t bother trying to climb to the moon.
Big Data = Big Impact
Craig Pumfrey is the director of marketing & communications at NICE Systems EMEA
I remember sitting in a history lesson at school being taught about the industrial revolution. My teacher explained to the class that ‘When you look back in years to come you will realise that you have lived through an ever bigger revolution’. At that time we didn’t know what he meant, but I now understand exactly what he meant.
My school days coincided with the first generation of home computers, when we bought games on cassette tape and talked in terms of kilobytes. As I progressed through college and university (games consoles were now appearing) we were beginning to talk megabytes and today the storage in my office at home is closer to a terabyte, with every device Internet and Cloud enabled.
Today, there is more data generated and stored than in the entire history of the world and we are still experiencing exponential growth. In 1992 there was one million internet devices, now there are approximately 17,000,000,000 and 1,000,000 new domains being created each month for them to access. However, in the corporate world, whilst we have become adept at generating masses of data, and increasingly capable of storing it, we have struggled to really get to grips in our interaction with it.
The big idea behind the latest phrase ‘Big Data’ is essentially a very simple and not entirely new proposition. It challenges us to look at how we can we turn all of the data sources at our disposal into usable information and knowledge, which we can in turn apply to improve performance and profitability across every aspect of our organisation. And crucially, how can we do this before the data decays to a level at which it is meaningless.
Organisations have been toying with Big Data for five, or even ten years when the discussion in customer service circles was around delivering and managing the multi-channel service experience and a ‘single view of the customer’. Since then we have seen an explosion in data flooding to and from the customer, driven by the take up of new channels and the accessibility of new devices and technologies. Today, the challenge for organisations is to not only have a holistic view of each customer, but also how to truly listen to and act upon the Voice of the Customer.
As I say the concept of Big Data really isn’t a new one, but it does represent a significant step change in the recognition of data in all of its forms and the untapped benefits for the organisation. Also, it is no coincidence that interest in it been born during a time of economic unrest and the fact that almost every business across every market must work harder than ever to survive. Today, organisations are turning over every stone to seek out even the smallest competitive advantage and this has led to a culture of analysis.
Typically, there are two types of ‘stone’ to uncover. The most familiar type of data is that which is structured. Marketers, finance departments and advocates of CRM have long been reaping the benefits of information, which is held in highly organised and accessible databases. However, it is the unstructured data that presents the biggest challenge, but also the greatest opportunity.
Contact centres have been at the forefront in taking advantage of unstructured data, specifically the strides that have been made using interaction analytics to interact with the call recordings to gain insights that help to improve the performance of agents and teams. Imagine being able to ‘listen’ to what the thousands of customers that call each day are telling you about your products and services, competitors, trends, needs, wants, expectations, things they are happy about and the things they are not. Now, multiply this across all of the communication channels from email, live chat and even social media and you can begin to imagine the benefits a unified ‘Voice of the Customer’ could have on marketing, sales, customer service, finance and even product development.
The ability to continuously interact with every information source in order to gain clear insight in to the intentions of every customer and then take action, isn’t just Big Data, it is a Big Impact, and for organisations working today, this is the next big leap forward in our technology and customer revolution.