A few days ago, Om Malik had some interesting analysis on the Bit.ly funding.
The most important aspect of Bit.ly is not that it can shorten URLs. Instead its real prowess lies in its ability to track the click-performance of those URLs, and conversations around those links. It doesn’t matter where those URLs are embedded — Facebook, Twitter, blogs, email, instant messages or SMS messages — a click is a click and Bit.ly counts it, in real time.
As you can see, Om thinks this deal is about data. I would agree as URL shortening has very little potential profit on its own. Why is the bit.ly data so important? They track where the link is shared and much information on who (in a general sense) has clicked the link. This data can track habits of the various ecosystems in social media. Do twitterfolk read different articles than Facebookers? If they do, what does it mean?
I admit I have been on a “data kick” lately, but when so much data is coming to the forefront of conversation, you just have to talk about it. Also, I have a lot of interest in data mining, so I have a little bias about data anyway. Two other blog posts today made me write this post. First, Seth Godin is one of the few people who can say something really interesting in less than a hundred words. Today, he has two words First, ten. These two words are the core of viral marketing or word-of-mouth marketing, and he explains it a bit more:
Find ten people. Ten people who trust you/respect you/need you/listen to you…Those ten people need what you have to sell, or want it. And if they love it, you win. If they love it, they’ll each find you ten more people (or a hundred or a thousand or, perhaps, just three). Repeat.
This is the general concept, but many people figure that you just need to pick any 10 people. In reality you need to know who those first 10 people should be. How do you find this out? Data. In what ended up being the perfect segue, Valeria Maltoni talks about an experiment with URL shorteners and who clicks what in her post Macro Insights From Micro Interactions. Valeria made an interesting comment about her findings during the experiment:
Content that is educational, practical, and potentially substantial – 45 post ideas, survey of business models, for example – looks very attractive. Would you like to know what got really low scores? The links I shared giving credit to the writer.
How did she make this conclusion? Data. She took her analysis from the data provided by the ow.ly URL shortener which is similar to bit.ly.
Social media is a lot of fun, but in the end each conversation only helps a very small group of people. As Valeria suggests, there are macro insights to be gained from all of this information. I have recently written about how Twitter, Facebook and small communities are data gold mines. I know it may sound hypocritical to keep declaring such things, but it depends on how you look at something. Twitter could be the stronghold of customer service due to its instant interactions and short conversations. Facebook may be the treasure trove of large brand marketing. Coke and Pepsi could take their fight to Facebook and find new and inventive ways to see what people really think of their products. Small communities like Today’s Mama give corporations instant focus groups without having to sift through the mentions of what people thought of the recent episode of House.
That is why the data is so important. For social media, selling anonymized data is a potential revenue stream. For marketers and researchers, the data can be whatever they want it to be. The data can be your customer service tool, or a way to figure out that your last ad campaign was a complete bust. It could also be the way people find a new product. The devil may be in the details, but knowledge comes from looking at the data “in the large”. Looking at data at the macro level can give you trends. Analysis of trends can tell you what 10 people you should approach about your product. Without that data and knowledge, you might as well throw a pebble in the ocean.
3 thoughts on “Why Is Data So Important?”
Thank you for the shout, Rob. And for highlighting the importance of data for observing and understanding behavior. You probably already know about it – I found The Numerati by Steve Baker helpful in identifying a few areas where I can research new ways to learn from data points.
I am familiar with Numerati, and I think it is a great book for a lot of people. I am already familiar with data mining and various data analysis techniques, so this stuff is fun for me 🙂
Great post on the importance of data.
Still amid the quantities of that are created, distributed and shared– we still have at least three big challenges:
1) Sifting the wheat from the chaff
Even with the latest search technologies– how can we easily find the most personally relevant information hidden within the data. How can we share our data in ways that make most relevant/useable to/by others.
2) How can data be presented in a more compelling way for better understanding? Data isn’t static… thus there’s a need for better ways to interact with data and present it in ways that more enaging/informative/revealing.
The interactive data visualization offerings from Visual I|O (www.visual-io.com) come to mind.
3) How can we better connect qualitative assessments with quantitative information for better analysis and decision making. Finding a a way to fuse Gut impressions with facts and figures in a “scientific” way…
My 2 cents
Once again–nice post!
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