April 8, 2016

Jeff Cole: The Big Data Myth

Jeffrey Cole, director of The Center for the Digital Future at USC Annenberg, was a recent guest on our podcast, B2B Nation: Smarketing Edition.

In this episode, we discussed:

  • How communication technology has changed the way marketers interact with prospects and customers
  • Whether consumers are reacting to or setting the digital precedent
  • Why big data is overemphasized and underutilized
  • What he’s most excited about at the 4A’s upcoming Transformation conference

Below are some of the highlights from our conversation.*

Social and mobile networking are the two biggest transformations of the decade. 

“There are two things that have really been transformational in the last 10 years which we did not expect when we started. When we started, it was obvious that how we work, how we communicate, and how we buy was going to change, but we didn’t anticipate social networks of over 1.5 billion people.

“I believe the most important development in marketing and communications in the last ten years is connecting to each other through the internet and through phones in our pockets. When we started, everyone connected through a PC on the desk with a hard wire to the wall, but and now this ‘third screen,’ the smartphone (TV being the first, computers being second), has become by far the most important screen we’ve ever seen — transforming banking, credit cards, communication, and just about everything else.”

Customers are both reacting to and setting the precedent.

“I just did this tour of Silicon Valley and the quote that all these companies used was an old Henry Ford quote. ‘If you asked my customers what they wanted, they would’ve said faster horses.’ That’s the Steve Jobs argument that customers don’t know what they want. There’s some truth to that.

“On the other hand, they moved into social media much faster than brands. Brands were initially nervous about letting their customers talk to each other. I’ve had to persuade a lot of brands that they need to be present in social media, because their customers were going to talk about them whether they were present or not. I think customers both lead and follow — probably lead a little more than they follow.”

Bragging about big data is a mistake.

“This desire to accumulate as much data as possible is staggering. Data can be amazing but data is only useful if you know what questions to ask. I don’t think many people are asking great questions. This can create problems with privacy. They say, ‘Let’s create lots of data.’ Lots of people are doing it, but not many are doing it well.”

Focus on asking questions about data.

“It’s far better to focus on which questions you’re going to ask and how you can make the best use of the answers. I love the Dan Ariely’s quote on big data: “Big data is like teenage sex. Everybody talks about it, everybody thinks everyone else is doing it, so everybody says they’re doing it.” That’s where we’ve been to this point — just trying to accumulate it. I would recommend most companies, unless you’re Google or Amazon, reduce the breadth of how much you collect and focus on what you’re really trying to learn.”

Data can be used for good, but it still raises concerns.

I believe every transaction is recorded. In marketplaces like Amazon, transactions that are not even fulfilled are recorded. The ability for Google to predict flu epidemics based on what people are searching for — this raises some concerns. As far as sharing personal data we’ve created a four-step bill of rights for consumers on how their data is used.

  1. Brands and advertisers should tell their customer what information is being collected and why.
  2. There should be privacy statements not written by lawyers for lawyers. They can be written by lawyers but not for lawyers.
  3. There ought to be an opt-out or an opt-in.
  4. People should be compensated for letting the company use their data. That compensation can be cash, but it doesn’t have to be. It can be coupons, early access to sales, etc.

We think those are the things consumers should gain and know about the use of their data.

*

B2B Nation: Smarketing is a podcast for B2B sales and marketers, featuring expert opinions and advice on the most important topics in the industry. Check out our other episodes on iTunes, or follow us on Twitter @B2BNation_Smar. This episode was sponsored by the American Association of Advertising Agencies’ Transformation 2016 conference. 

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*Some excerpts have been paraphrased to enhance readability.

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