Big Data Myths: Why All Data is NOT Created Equal
September 19, 2012 Leave a comment
At Digiday Exchange in NYC in August, eXelate CEO eXelate CEO Mark Zagorski took to the stage to discuss Big Data, how companies should approach it, and some of the most common myths surrounding it. Take a look at the full interview below, or scroll down to read some of the discussion highlights.
On Big Data: Big Data isn’t about having a big database – it’s about having many pieces of unstructured data in which you look for signals that create patterns of consumer behavior upon which you can act. It’s not CRM data, but it’s about seeing traffic in and out of stores, knowing sales, and making connections between the two. Most companies think they need an all-encompassing solution for data. But in reality, there are a lot of small things brands and advertisers can do to claw away at each pile of data, and these small things can prove incremental results – for example, bringing your offline data online. The trick is to look at the specific thing you want to do – drive higher conversion rates or acquire more customers – and apply a specific data set to your problem.
Data Myth #1 – All data is created equal. There is good data, and there is bad data. There are valuable and non-valuable signals. When you look at the Lumascape (another myth!) there are a lot of different data companies. Every logo is the same size but in reality, every data set is not the same size nor do they have the same caliber of data. Take online data versus offline data; a modeled offline user is different than a registration-based online user when it comes to something like demographic information.
Data Myth #2 – First party data is more reliable than third party data. First party data is great – for the first 50 people that you’ll reach with it. The issue with first party data is that it doesn’t scale, and using it is essentially talking to the same customers that you’re already in contact with. That’s great for upselling and sales retention, but what about acquiring new customers? The best use for first party data is as a seed to model against – you want the best first party data to model a top-of-the-funnel audience.
Data Myth #3 – The Lumascape is an accurate depiction of the complexity of the ad tech world. All due respect to Terry Kawaja & Co, but the chart was created for one reason – to sell banking services. There are two key issues with the amount of logos on the slide – (1) there are a lot of opportunities for consolidation and (2) they create a lot of confusion, which in turn creates a market for services that will clear up that confusion. An advertiser or a publisher does not need to work with every single company on the Lumascape chain to make a connection – many times they’re not involved with any major decisions. The Lumascape overcomplicates areas that are simple, and oversimplifies some areas that are complicated.