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Is Big Data the future of advertising ?

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pierre-nicolas schwab

on 4 July 2017

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Transcript of Is Big Data the future of advertising ?

yesterday
2018
in 15 years
once upon a time
in 5 years
Is Big Data the future of advertising ?
1861 : the revolution "One price for all"
(John Wanamaker)
yesterday
Consumerism post-WWII era : consumers buying more, farther (1 car in every household) hence need to nurture loyalty
Today
Profiling based on data collected via cookies
duration up to 8000 years, average lifetime 2.3m
not cross device : SSO necessary
Happening tomorrow
Legal framework gets tougher (GDPR, ePrivacy, ...) but in some countries remain very permissive (USA)
Cookies practices have changed (built-in privacy features in browsers)
"wild" data collection more difficult but ...
Pervasiveness of data collection may increase (legal can't cope with technology) : beacons, sensors, ... it's just a matter of authorization (the Achille's heal of all legal frameworks)
3 years from now
data literacy has increased : trust and privacy are more highly correlated than ever
legal framework gets better understood
consumers wants more value for their data : "attention" becomes the new currency (blockchain ?) : game changer for advertising industry
5 years from now
5 to 10 years from now
Online and offline merge (
phygital
experience is the rule)
Tailored pricing and advertising go offline
Two possible scenarios :
Consumers either completely connected and profiling dramatically improved (what's left for free decisions)
or consumers retaliate and an ad-free model spreads (customers don't want perfect privacy, see Rust 2002)
Is there a future ? Foucault (1966) : "Man is an invention of recent date ... [a]nd one perhaps nearing its end"
Advertising can't be taken in isolation ; future developments will follow technological trends
What can you do with machine learning, AI, ...
Advertising is one type of interaction among others
A philosophical perspective on Big data and machine learning
Not necessarily answers to your questions but rather a starting point for your own brainstorming
Today's presentation
Hello, I'm Pierre-Nicolas ...
Engineer turned into PhD (quant marketing) with a twist for finance (MBA)
Head of Big Data at RTBF
defines the vision and business objectives
designs algorithms
tries to get things running
find the money, people, makes coffee and much more ...
Proud founder of IntoTheMinds (market research quali + quanti)
known for having the most expensive business card in Belgium
A long time ago, this is how business looked like
Fear is a good motivator to move forward
Fines up to 4% turnover or €20m
Sellers knew their customers ; they
talked
to them. Relationships grew from there and
loyalty
too.
Local businesses ; tailored prices ; WOM instead of advertising
What is the value of online advertising ?
Big Data very much based on data taken out of context ("capta", see Kitchin)
Fragmented data reshared
out of context

Retargeting practices perceived negatively
Physiogonomy
Monadology (Leibnitz)
Future of data insights calculation :
More data mixed in less permissive countries : retail + bank for instance but problem of consumers' acceptance (WIIFM ? ING failed attempt)
Online data collection extends to offline (e.g. google)
New type of data gets collected
Use case : car insurances
Precision telematic units > mobile apps
Mobile apps = marketing tool
Problem = "power of prediction" (more data needed to explain variance of drivers' bahaviors)
Examples : CSS (CH), Generali (DE), Swica (CH)
Key take-aways about the near future of data collection
Your body = last frontier in data collection
What are we trading privacy for (intrusiveness vs. financial savings) ?
Wearables will become the norm (beware of penalty if not wearing them !) : opens the door to more selection and less solidarity
Emotions can already be reliably measured (private data per law)
source : Clearchannel.co.uk (accessed 24 June 2017)
Advertising will increasingly be based on emotional cues (remember the importance of non-verbal and body language : application in online communication?)
Facebook emoticons : an explicit feedback mechanism to measure emotions
“Half the money I spend on advertising is wasted; the trouble is I don't know which half.”
The need for traceability of advertising investment is an old one
The dream for targeted advertising is not new
Does Big Data help fulfill that dream ?
What does profiling mean for advertisers ?
Understanding the nature of Human Beings is not new
Panopticon (J. Bentham and M. Foucault)
Controlling people with the help of technology is not new
Birth of CLV concept (1988)
Loyalty gets correlated to profitability (Reicheld 1996)
Consumers get more complex : need for modeling behaviors (70's)
Sociologists started building behavioral models : data collection difficult (limited variety, granularity).
Data used to verify the model.
After 2000 things changed
Big mess in the aftermath of GDPR (25 May 2018) and DPA showing muscles
Projects blocked because of uncertainty, third-party cookies under threat (ePrivacy)
More room for startups (biggest firms will fear fines and stopped certain projects : already happening)
Predictions for tomorrow
Consumers will be forced to pay attention at privacy : retargeting will be hit by literacy + adblockers
Trust will become instrumental : need for a breakthrough in targeted advertising
Bad online data collection practices will get increasingly punished
My predictions
Some questions for you :
How do you believe advertising can
really
create value ?
Is targeted advertising really a one-size-fits-all solution ?
What is missing today to create meaningful advertising ?
Where do you think we are today ?
Dr. Pierre-Nicolas Schwab | pn@intotheminds.com | www.Intotheminds.com
The behavioral model is not preexisting : machine learning algorithms looks for correlations between variables to profile consumers
What does loyalty mean today ? Algorithms recommend (e.g. ads) + nudges.
The concept of loyalty needs to be revisited. Do we control our own behaviors ? (too many cues, too many stimuli : attention fragmented)
Full transcript