From data wasteland to data jungle
Increasing global digitalization brings huge and ever-growing amounts of data. It all began with the invention of the browser that made access to the Internet via a desktop computer so much easier and faster. More and more consumers started to enjoy direct online interaction with each other and with companies… and started to leave their traces. The cost of observing these interactions fell to marginal costs that were very close to zero. It was, for example, possible for the first time to observe on a large scale not only that an advertisement was shown to a consumer, but also how the user reacted to that ad. So marketers were able to measure whether the consumer clicked and even purchased after clicking on the ad. Previously, a comparable measurement of advertising success was only possible for direct marketing activities but the cost of doing so was much higher and the quality of measurement much lower. For example, direct marketers could not even observe whether the consumer opened the letter they sent. Just compare this opportunity to the ones that email marketers have today.
The next major step forward came with the availability of affordable and powerful smartphones and mobile data plans. They now enable companies to target consumers everywhere, add location-based information to consumers’ actions, and record consumers’ reactions at the location and the time where the reaction occurs. Thus, instead of interacting with consumers during the few hours per day that they use their desktop, companies can nowadays interact with consumers essentially 24/7. The availability of data exploded and Hal Varian, chief economist at Google and previously a well-known researcher in microeconomics, became famous for saying around 2005 that “the sexiest job in the next 10 years will be statisticians.” So, instead of a data wasteland we seem to be living in a data jungle full of ripe fruit. Can marketers simply pick it up now? Is all of it wholesome? Or is harvesting insights from a data jungle a more challenging task than anticipated and one that requires new skills?