Polygraph Media Blog

Data Mining... a Primer for Marketers & Decision-Makers (Part 1)

A bit of a dry post today, unless you're a data geek like we are.

Since our launch, we've entered a few customer and partner conversations that would've been best served with an introductory primer in data mining.  I would estimate that a majority of marketers don't have a firm grasp on the requirements and/or what the opportunities are in the field of data & data-driven decision making.

So here's my "business guy shorthand" on data mining, what's available today, and the opportunities all of this affords.

First of all, content on the Internet has exploded as others have chronicled over the last few years. From the linked article above: 

"...compliments of Dave Turek, the guy in charge of supercomputer development at IBM: From the year 2003 and working backwards to the beginning of human history, we generated, according to IBM’s calculations, five exabytes–that’s five billion gigabytes–of information. By last year, we were cranking out that much data every two days. By next year, predicts Turek, we’ll be doing it every 10 minutes."

How did this happen, you ask?  Look no further than the social media movement, which democratized publishing to the web via blogs, put our videos online via YouTube and Vimeo, broadcasted our short-form opinions via Twitter, and chronicled our life through Facebook.  And alongside those services are a series of other services that all collectively help us chronicle our lives online.

I personally love this infographic below that illustrates just how much data we're all creating today.  It's a far cry from when we needed a web developer to post content for us.  Additionally, check out this compendium of stats from 2011.

In addition to the revolution in self-publishing, we've simultaneously had a revolution in the collection of data in the corporate realm.  Gone are the days of Day Timers, Day Minders, etc.  In with the world of Salesforce.com.  New Point of Sales (POS) systems are no longer analog but rather "digital", which allow for the collection much more data that can be analyzed and explained. Every part of a modern business can be digitized and recorded today for data analysis -- and smart businesses are doing just that even if they don't have the analysis capability just yet.

Additionally, government agencies are publishing data to the Internet now with increasing frequency -- making records public that were once published to books, stored on microfiche, or available only upon specific request in-person.

The greater point is that we're all creating data about ourselves every day -- personally, as citizens of our locality, as employees, etc.  Although the "quantified self" movement is relatively young, we're already uncovering introspective ways that we can get smarter about the things that we're doing using data as our guide.

Through collecting and analyzing data appropriately, all stakeholder groups can benefit.  A few quick examples...

• Self -- quantifying exercise, meals, etc. for better health. 
• Business -- quantifying operations to understand efficiencies in staff, travel, etc.  Mining customer data to understand market segments & purchase intent.
• Public Sector -- combing through the data to better isolate fraud potential.  Using data to optimize tax receipts.

The common term across all of them is "efficiency" -- using data to become more efficient.  In a hypercompetitive world, efficiency is the way to unlock more profits through decreased costs, increased revenues, and/or improved experiences.

Additionally, data can be predictive and prescriptive.  Let's say you are in a family of four and have bought two cars over the last 8 years.  You have a luxury car with 20,000 miles and an SUV with 200,000 miles.  It's a simplistic case, but the data in this example suggests that you might be in the market for an SUV soon and years away from another luxury car purchase.  That's the predictive part.

Odds are if you got the SUV serviced by a data-driven car dealership, you've heard from them recently about trading in that old clunker in exchange for a shiny, new SUV.  That's the prescriptive part -- send everyone likely to buy a new car a new advertisement.  Like it or not, but it happens all the time already... all while many corporate marketing departments are not fully optimized to take advantage of the opportunities available via data.

As we've talked with a number of companies about our work in big, social data, we've discovered a wide range of companies in terms of adoption of data analysis -- collection, normalizing, analysis, data-driven decision making.  Some are leading the way, and others still make analog decisions.  To be expected, although we do think the shift towards data is a long-term trend that will be impossible to ignore for most.

In the next blog post, I'll talk more about the mechanics of making sense of it all -- from data normalization to analysis and informed decision-making.

Polygraph Media - Adventures in Big Social Data

Sorry we've been so quiet lately - have been hard at work taking a product to the marketplace.  We are jumping into the big social data business feet first.  You can sign up for our private beta at http://www.polygraphmedia.com.

In addition, Tommy Perkins (who traveled with me to Denver) made some great observations in his blog post yesterday.  I encourage you to check it out.

All told, we are very excited about these new opportunities and we see a lot of potential in big social data.

Cinchcasting

One of my favorite new products is Cinch -- something that I think can only be described as "the Twitter of podcasting".

I use it to quickly record thoughts on what is going on in tech, social media, etc. and may very well turn it into something that I publish from my Twitter account daily.

I think there is a huge opportunity in sharing insightful thoughts that can be captured in 2-3 minutes.  For me, it is pretty low investment timewise -- lower than a blog post and it is certainly easier than setting up or even participating in an existing podcast.

I also think there is a big benefit for the listener.  Podcasts are a long & tough commitment for people to make unless they are on a plane, driving long distances, or exercising.  Otherwise, I think 2-3 minutes is ideal for listening to a well-reasoned thought or observation from someone you respect.

Will of course keep you updated as I become a regular Cinch user.

For now, I invite you to check out my page at http://www.cinchcast.com/ctreada.

AOL, the Huffington Post, and the assault on local

Today is a watershed day in new media, whatever it is that we're calling it in 2011.  Why?  Because AOL is now truly doing something interesting in the content business by buying one of this cycle's best content properties, the Huffington Post, for $315 million.

Sure, AOL spent 40% of its available cash on the property.  Yes, there will be a culture clash as HuffPo is integrated into AOL.  And of course, we've heard of issues with AOL's integration of TechCrunch.  

But this isn't the same AOL that distributed tons  of these discs via mail for more than a decade.  It's a company led by someone with experience at a market leader who has a vision for the future.  That vision requires that AOL repeatedly produce profitable content -- something that old media has certainly struggled to do lately.

The TechCrunch and now HuffPo acquisitions, however, tell me that AOL has determined that it is a better strategy to buy great properties than to build them.  Why?  I'd posit three reasons:  1) these are properties that have discovered how to create quality content sustainably, 2) these properties make money, 3) AOL's experiments with Patch and Seed likely have not succeeded as they've hoped.

But the last reason isn't necessarily a criticism of AOL.  If you look at business across the United States, one megatrend that we're seeing is that big, relatively antiseptic brands are winning the war for $$ and mindshare against local businesses with local/regional flair.  Like it or not, eyeballs and attention flock to Chili's, the HuffPo, and the NFL instead of Billy Bob's Bar & Grill, the Smalltown Gazette, and high school football.  The American experience is homogenizing right before our very eyes, and as such brands that specialize in products with mass appeal will likely win in the long-term over local providers that struggle to effectively reach a local audience.  Niche businesses will survive, but a vast majority of local businesses are going to continue to suffer as the local experience gets more corporate.

I'd argue that these trends are driving the content business and will continue to do so.

We will see what happens with AOL's play -- one that puts it in Demand Media's neighborhood and clarifies competition with old media.  It's on.  I think the early advantage is in companies like AOL & Demand who are driven by the unit economics of creating content far more than old media as a generalized whole.

Old media has two other distinct disadvantages: 1) significant overhead, and 2) traditional "journalistic" standards.  But as an industry it is much, much larger than AOL or Demand Media and can still compete if meaningful changes are forthcoming.  And you can argue that neither AOL nor Demand Media have quite yet figured out how to scalably create great content for profit.  It will be an interesting battle to watch in coming years.  Consider also that of the major tech players only Apple, Yahoo, and Amazon have made major content plays.  Are Google, Facebook, and Microsoft next to jump in?

It's possible that as old media continues to be disrupted, that content is the next bubble.  We'll see how the industry responds.