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Tuesday, 16 September 2014

Why big data is the new cocaine

From an unusually downbeat discussion about big data to the excitement of the Internet of Things, Brian Tarran reports on a rollercoaster-ride of a morning at yesterday’s IAB Engage conference.

Bryan Melmed

Bryan Melmed: “When people start talking about big data it’s like they are on cocaine.”

Bryan Melmed’s presentation at the Internet Advertising Bureau’s Engage event yesterday came with a warning: you might not like what you’re about to hear, he said.

Melmed is director of insights at Exponential, a company that promises “to turn ‘big data’ into advertising intelligence”. But despite the hype surrounding big data, Melmed is at pains to stress that “data is not going to solve every problem”. Data is only human, he said. “It’s touchy, so beware of putting your full faith and trust in big data”.

“Humans live in an analogue world, and when you’re dealing with analogue data, there is a signal-to-noise ratio – and the more you listen the more you get confused”

Big data is also very messy, Melmed said. “This is where the human element comes in. Humans live in an analogue world, and when you’re dealing with analogue data, there is a signal-to-noise ratio – and the more you listen the more you get confused.”

However, through this complexity, big data forces us to take a closer look at the inconsistencies and intricacies of humankind, said Melmed. It forces us to abandon our natural way of thinking about consumers.

In marketing, we typically think in stereotypes – ‘soccer moms’, ‘connected urban professionals’, that sort of thing. “When we say we’re going to market to soccer mums, that’s not a person, that’s a stereotype,” said Melmed. “Our brains are designed to create patterns and shortcuts, but that does a huge disservice to every single person we deal with, who is not easily summarised by 30 or so demographic characteristics.”

So big data has the potential to change the way we do what we do in marketing, an in other walks of life. “But we need to be careful about how we talk to each other about it,” said Melmed.

“We’re living in a world of hype,” he explains. “I took my girlfriend to an event like this recently, and she said it was like watching the movie ‘Scarface’. When people start talking about big data it’s like they are on cocaine.”

Consider the evidence. According to Melmed:

  • Big data makes you feel smart
  • Big data makes you feel sexy
  • Big data makes you talk a lot

And then there are the crazy claims about big data. “No, it’s not going to predict terrorist attacks before they happen,” said Melmed. “It’s not going to cure cancer. And we are not going to solve Wanamaker’s problem of figuring out how much of our advertising is wasted.

“I want to tell you that there’s a silver lining,” Melmed said, “but that means there is a cloud. It’s a future with immense possibilities – but we need to recognise the limitations.”

Matt Ridley

Matt Ridley: “The economy has been through a horrible crunch, but the world as a whole has bounced back.”

If that’s left you depressed…

If Melmed was IAB Engage’s resident realist, Matt Ridley was the day’s optimist. The scientist and journalist, and author of the book ‘The Rational Optimist’, was on hand to reassure us that, despite claims to the contrary, we, as a society, are still better off now than at any time in human history.

“The economy has been through a horrible crunch, but the world as a whole has bounced back,” said Ridley. “It’s seeing three-to-five per cent economic growth.”

But money isn’t everything, according to Ridley. The key metric for gauging living standards is time, and how long it takes someone to fulfil a need. Let’s say you want to read for an hour tonight, before going to bed: how long would it take you to earn enough lumens to see your way through a chapter or two. Today, it would take you half a second (perhaps a fraction longer now, thanks to recent energy price hikes). In 1950, it would have taken you eight seconds; 15 minutes in 1880 and six hours in 1800.

And if you want something else to get excited about…

Andy Hobsbawm

Andy Hobsbawm: “If you thought a lot of communication goes on today, just wait until all the things start talking.”

The Internet of Things is probably the next big… err… thing for marketers to get hyped about. And who wouldn’t be enthused by the possibilities afforded by web-connected fridges, home energy systems and even shoes?

Andy Hobsbawm, the founder and CMO of Evrything, explained that by 2015 there’s expected to be one trillion connected devices, creating opportunities for a range of new services designed to save people money and make life easier.

For most people, Hobsbawm said, the Internet of Things is about machine-to-machine communication: for example, the smart fridge that can automatically place a grocery order with a retailer when you’re running low on food. But what interests Hobsbawm in particular is the potential for people to more closely interact with the things in their lives.

This is already starting to happen, he said, and gave the example of the Nike+ range of products, where a tracking device is embedded in a pair of trainers in order to monitor and report on the wearer’s activity levels.

“But putting embedded silicon into everyday products is not trivial,” said Hobsbawm. Nor is it inexpensive. Despite steep falls in the cost of embedded chips, at about $5 a unit, they are probably still too expensive for most consumer goods manufacturers to consider.

Evrything’s solution, however, is to create identities for products using unique tags and barcodes, which allows people to link products to their own social IDs. Diageo offers an example of this. For a Fathers’ Day promotion, that sort to encourage men to buy a bottle of whiskey for their dads, the company printed QR codes on whiskey bottles. Sons were asked to scan the code, which took them to a website where they could record a video message, using their phones, which was then linked to that tag. Then, once the gift had been given, fathers were invited to scan the tag to reveal the message.

This, of course, is only the beginning of what might eventually be possible. “And if you thought a lot of communication goes on today, just wait until all the things start talking,” said Hobsbawm.

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Readers' comments (5)

  • I agree with everything in this article - but take huge objection with the title. Characterize Big Data as a silver-lined storm cloud or a classic roller-coaster if you will. But cocain is not only a dangerous high with painful lows - it is a source of utter and complete destruction of the human mind and society - and that is not a fair assessment of the qualities and risks in "big data."

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  • “No, it’s not going to predict terrorist attacks before they happen,” said Melmed. “It’s not going to cure cancer."

    A large number of embassies across the Middle East were evacuated recently as a result of patterns observed in Internet chatter. Similarly, if you have any knowledge of the size/scope of genetic analysis undertaken in order to locate the causes of cancer you'd understand that big data analysis plays a crucial role in both. Another classic trait of cocaine abusers is their ability to talk absolute codswallop.

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  • Don't think the title is in bad taste.

    Is totally witless though, and lazy.

    Ineffective comparison.

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  • Well, the title got my attention and made me read the article - isn't that the point? The reporter was just doing his job - reporting on the IAB Engage conference. Think there were some interesting opinions on big data and how it will be used in the future.

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  • Digital data also has a signal to noise ratio. For example, 24-bit PCM audio has a (best case) signal to noise ratio of 144.49 dB.

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