Chris Anderson from Wired opened the DMA conference in Las Vegas focusing on a subject on everyone's mind this year: big data. For Anderson, big data isn't just little data, bigger. It's a major shift of mind set that he predicts will be a necessary core competency for businesses and the work force alike.
We've come from a world as marketers where there is a right and wrong. A single hypothesis that we test or a good model that we want to scale. But big data isn't about that. We have to think like Google.
When Google came along, they realized their data set was the internet. It was a mess but a beautiful one. With that much complexity though, how were they going to sift through that much data?
In the world of big data, it's not about knowing the structure of the data per se. It's more about looking for statistical correlations and that fuzzy statistical technique is what the mindset of big data is. You may not understand the mechanism but you have to live in that data, It's an uncomfortable place, it's this fuzziness that is the world we're going to live it.
Now that we carry devices, we are radiating data. From our bodies, our checkins, our emails and interactions, we are creating a breeding ground for the next generation of technology. The Internet of things, the move toward digitizing the objects around us so they are driven by data, will fundamental shift our world and the way we can market to people.
If we forget the theory and throw enough data at the question, patterns will emerge. To that we must then apply our own skills, instinct and experience. Customers don't always know what they want. You need to show creativity and innovation and then test to fine tune.
Shifting the bell curve to the long tail
In order to move our industry forward, we have to think out of the box to find wisdom. Most retailers and marketers have looked through the lens of the bell curve for most of the 20th century and into this one. The world then was all about blockbusters. Targeting the middle was the marketers approach as that is where the majority of the market was seen to be.
The internet has changed that. If the bell curve is the 20th century, then the long tail is the internet. Now, more than ever, we are given more choices and with more choice, the more fragmentation we're seeing. For instance, in television, the more the average number of channels increases, the more the ratings of the average top ten shows go down. It's not because they aren't as good, it's just people have more choice.
If you look at the long tail model, you'll see that once you remove the top, lets say 100, popular items in your list, the long tail isn't zero but could be tens of thousands of purchases. You have to cut off the head to see the tail.
This shows that a small number of things are very popular but there are a large number that aren't so we can't forget that they still add up to a significant proportion of the market. It's about recognizing that and targeting a niche market to help you stand out.