Digging into Big Data

insight

In one year, people store enough data to fill 60,000 Libraries of Congress. YouTube receives 24 hours of video every minute. Manufacturers are putting sensors and chips into appliances and products, generating even more data. However, more data are not better unless they can be properly processed, analyzed, and interpreted. And therein lies the opportunity and challenge of Big Data, data sets that cannot be effectively managed with traditional tools.

One industry expert, James Kobielus, sees Big Data as distinctive because of: Volume (from hundreds of terabytes to petabytes and beyond); Velocity (up to and including real-time delivery); Variety (encompassing structured, unstructured, and semi-structured formats such as messages, images, and GPS signals); and Volatility (with hundreds of new data sources in apps, Web services, and social networks).

Some companies are harnessing Big Data. UK supermarket giant Tesco uses the 1.5 billion pieces of data it collects every month to set prices and promotions; U.S. kitchenware retailer Williams- Sonoma uses its customer data to customize versions of its catalog. Amazon reports generating 30 percent of its sales through its recommendation engine (“You may also like”). On the production side, GE set up a team of developers in Silicon Valley to improve the efficiency of the jet engines, generators, locomotives, and CT scanners it sells. Even a 1 percent improvement in the operation of commercial aircraft would save $2 billion for GE’s airline customers.

Sources: Schumpeter, "Building with Big Data,” The Economist, May 28, 2011; Jessica Twentyman, "Big Data Is the ‘Next Frontier,’” Financial Times, November 14, 2011; Jacques Bughin, John Livingston, and Sam Marwaha, "Seizing the Potential of Big Data,” McKinsey Quarterly 4 (October 2011); "Mining the Big Data Goldmine,” Special Advertising Section, Fortune, 2012; "Financial Brands Tap Big Data,” www.warc.com, September 13, 2012; Thomas H. Davenport, Paul Barth, and Randy Bean, "How ‘Big Data’ Is Different,” MIT Sloan Management Review 54 (Fall 2012), pp. 43-46; Andrew McAfee and Erik Brynjolfsson, "Big Data: The Management Revolution,” Harvard Business Review, October 2012, pp. 60-68; Ashlee Vance, "GE Tries to Make Its Machines Cool and Connected,” Bloomberg Businessweek, December 10, 2012, pp. 44-46.

Marketing Intelligence

A marketing intelligence system is a set of procedures and sources that managers use to obtain everyday information about developments in the marketing environment. The internal records system supplies results data, but the marketing intelligence system supplies happenings data. Marketing managers collect marketing intelligence by reading books, newspapers, and trade publications; talking to customers, suppliers, distributors, and other company managers; and monitoring online social media. Table 3.1 shows eight ways to improve the quality and quantity of marketing intelligence.

Companies that make good use of “cookies,” records of Web site usage stored on personal browsers, are smart users of targeted marketing. Many consumers are happy to cooperate: Not only do they not delete cookies, but they also expect customized marketing appeals and deals once they accept them.