It is one of the most celebrated sequences in film history. In Stanley Kubrick’s “2001: A Space Odyssey”, a group of apes are foraging when they get confronted by a rival tribe. One of the apes grabs an animal thigh bone and uses it to fight off another. In triumph, he throws it into the air and the spinning bone cuts to a revolving space station.
In conceptual terms, the use of the first tool is the big shift, not the leap into space which it ultimately leads to. In between, tools will take many forms - the big question is how we will use them. At this year’s DataIQ Future Summit, sponsored by Experian Marketing Services, this issue was considered from a range of different perspectives and with a number of different answers.
Michal Kosinski, deputy director of the Cambridge Psychometrics Centre, made the point that, “there are risks, but also amazing opportunities - technology is morally neutral. We can use it to improve life or to harm ourselves - just like a knife.” His own work has sparked considerable debate over whether it is positive or harmful.
He analysed Facebook likes and was able to predict a range of personal and lifestyle characteristics from this simple variable to a surprisingly high degree of accuracy, identifying the “Big Five” personality traits as well as IQ levels. This has troubled commentators in the media - his predictive models generated over one hundred stories.
Some of the predictors of personality are unexpected, such as that a like of swimming is one of the best predictors of happiness. “So you could base your marketing on known traits of individuals in a group and use their referrer path to get hold of that information. Facebook, LinkedIn, Google+ log ins can provide very accurate insight into their personality,” he told delegates.
His work is now progressing into other data sources. “Online behaviour can be highly revealing because it is more intimate, for example our search terms. They can be used to predict gender to 96 per cent accuracy using a very short text string,” he said.
Marketers can use this data to understand their audiences and customers in better detail. Said Kosinski: “It is like Pepsi v Coke. There is no real difference in taste tests and the two groups of drinkers are really similar, but Pepsi drinkers are lower in intelligence. Although that could be as a result of the marketing used to attract that group.”
While marketers have a significant appetite for this type of big data insight, there is an issue about whether it can be used neutrally or will risk some type of harm. “We have to make sure we don’t spook people and damage their trust. One way to do that is by focusing on the benefits for people, such as Amazon recommendations. If you achieve a good match, people want it because it is personalised,” said Kosinski.
Thomas Power, head of communities at Google+ Networks, sits firmly in the camp which views new technology and data in strongly positive terms. Considering how society might adapt to new concepts, such as the self-driving car, he said: “How comfortable will people be in allowing technology to run their lives? We are already slaves to technology - so why not let it become the best tool it can be?”
He examined five key drivers which are setting the pace of change in “The Age of Context”. The first of these is mobile, with the average consumer lifting their handset to their face 150 times a day, he reported. The second is big data, closely followed by the third, physical location. As an example of how that may transform industries, he discussed a start-up called FlightCar, which allows individuals to rent out their cars while they are away on holiday or business. It breaks even on the rental service and makes its profits by selling the data to other service providers at airports.
“What does Hertz or Avis do about that? Does it acquire the business, kill it or partner?” he wondered. The fourth driver of change is sensors, which are multiplying in number in vehicles, mobile phones and even paper. “Soon you won’t be able to lose anything,” said Power. The final force is social media, which many CEOs hate, not least because they lack the skills to use it effectively.
Not all business are putting up this type of resistance, however. Gill Whitehead, director of Audience Technology and Insight at Channel 4, explained how the broadcaster is changing as a result of the data it is collecting on the “connected viewer”.
“Broadcasting has always been one-to-many, whether via terrestrial, satellite or cable via a ‘dumb box’. We had little idea about the viewer. That has changed - the main TV set is increasingly connected and viewers are using other connected devices,” she said. A counter-intuitive result of the growing number of access devices in households is that TV viewing has actually increased, she pointed out, with an average of over four hours daily. Ad revenues have also held stable and are forecast to rise 3 per cent in 2014, while subscription payments for pay-TV services are generating new sources of income.
Change is starting to happen at high speed, ushering in an era of one-to-one broadcasting for the first time. For Channel 4, this started two years ago when it began to offer new ways to access content through its online portal, creating an opportunity for data capture. “Transparency was key and we approached that very carefully. We have a viewer promise, which is fronted by Alan Carr, that has allowed us to build trust with our audience. So now we have nine million registered viewers,” Whitehead told the conference.
Data is used to tailor its 40 million emails each year, telling viewers when a new series of their favourite show is about to begin, for example, thereby triggering an “OMG, you remembered!” reaction. Even more significantly, the channel is pushing to have profiling data adopted into the ad trading systems which are increasingly being used to place ads within the on-demand viewing space. “We went clients and agencies to understand how to use data to innovate on how TV is traded - it has been done the same way for a long time,” said Whitehead. “We will be taking that to market at scale and believe half of advertising will become tradable via targeted audiences.”
Another business seeing a huge shift as a result of technology and data is Weve, the joint venture between O2, Vodafone and EE.
If that is the upside of how technology can help business, several speakers also pointed to possible downsides unless society is careful or business makes more effort to change. “We could have had Utopia, but we would rather tweet,” is how author Tom Chatfield viewed some of the missed opportunities with technology in his opening speech.
Twitter has become a conversation without speech and one which can be reinterpreted far beyond its original intention. Chatfield noted that this is a very new phenomenon in human communication and suggested that we need to “learn to design for loss of control”. Equally, we need to be wary of blaming new tools for the effect they have. “Technology is very good at helping us to spend our time, but is bad at telling us what to spend our time on. That is why the media view of ‘puppetmasters’ manipulating consumers is very far from the truth. It is a constant struggle,” he said.
Chatfield summed up this up as a tension between “what technology wants and what I want.” It was a view echoed by Dave Coplin, chief envisioning officer at Microsoft UK, who said: “With twenty years of experience in the IT industry and seeing how people use technology, I can see it has become the prison, not the release. The problem is us.”
Email is a prime example of taking a useful tool for distributing information and turning it into a “bucket for digital conversations”. New social tools are better suited to managing such exchanges without overwhelming users. As Coplin point out, nobody ever gets to a state of having an empty inbox - or at least not for more than a few hours.
Creating the social business is one way to transform this model, starting with the adoption of social media to share information. This should unlock collaboration by making information freer and more widely distributed, rather than reserved and kept as a political asset by executives. “It is the power of the network that changes the way business works,” said Coplin. “We need to create organisms, not organisations which are unable to respond quickly. That is about leadership, not management, which is a fundamental shift.”
James Hanscombe, head of insight, argued that this medium is approaching its tipping point. “Mobile advertising is still in its infancy. However, if you look at the way digital advertising grew from nothing to take 20 per cent of all ad spend, mobile is following the same trajectory in shorter time frame.” He predicted it will achieve £1 billion spend next year, double what it took in the previous 12 months. “That is what is needed to pull in proper brands and advertisers now that a lot of the groundwork has been done,” he said.
One of the insights he shared with delegates was the importance of getting the timing right in a campaign. “We have done research across all the campaigns we have run which shows that 3pm on Thursday is the best time over all - subscribers are six times more likely to respond compared to 10am on a Tuesday,” he said. Equally, a message of less than 240 characters will get twice the level of response, while a message over 320 characters long will drive three times the level of opt out.
That points to the importance of introducing a strong data governance culture. Hanging over the event was the shadow of the new Data Protection Regulation - still unconfirmed at the time it took place - and its potential impact. Moritz Godel, associate director at London Economics had been commissioned by the Information Commissioner’s Office to examine the cost implications of the Regulation. He noted that: “The impact on business is likely to be profound through its potential to limit what business cand do with data. There are some in the European Parliament who want to do exactly that.”
Many of the estimates of the cost have failed to recognise compliance efforts that are already in place, he said. “Up to 80 per cent of companies we spoke to are unable to quantify their current spending on data protection,” said Godel. “That probably reflects a lack of clarity around the term. Those companies gaining a high benefit from data do spend a lot on it.”
Much of that expenditure will be around what Colin Grieves, director of strategy and propositions, data and analytics, Experian Marketing Services - headline sponsors of the DataIQ Future Summit - described as “old data. It is still important because it drives the business. For example, if you understand the demographics of your customers you can look at how many other people there are who look like that.” He also provided a useful guide for how to deploy new data sources: “Just because you can, doesn’t mean you do. You need to be aware of not making it scary.”
Sometimes, while you are waiting for the best tool for a task to be invented, you can forget that you already have one which gets the job done. Data is undoubtedly changing and will open up new opportunities. In the meantime, delegates to the Future Summit would do well to remember how far data has already allowed them to evolve.