Big Data, Small Price

If you're not measuring your data in petabytes and exabytes, you're not truly in the world of Big Data, at least according to the purists. But increasingly, big data has come to mean the powerful analysis of much more reasonably-sized datasets, and that's where big data becomes a tool for all publishers to consider.

Consider just one of big data's outstanding virtues: its ability to drive innovation by providing
insights from data correlating customer behaviors, patterns and specific requirements -- including data that have traditionally been cast off as odds, ends and by-products of "analyze-able" data.

Big data enables the collection and analysis of offline and online data across touchpoints. Customers are generating more data about their buying behavior, likes and dislikes in more places than ever before. In addition to data stored in widely used CRM applications, untapped and tremendously useful customer satisfaction data exists in tweets, blog posts and other social media
content.

Using big data collection and analysis to capture behavior including preferences, product
selection and spending patterns across thousands of customer interactions enhances the ability to measure and impact customer satisfaction and loyalty in ways never before possible. Operational, financial and customer data across a business can now be integrated and processed efficiently to aid the identification and attribution of revenue drivers, yield actionable insights into product development and to provide deeper levels of customer engagement. Customer level revenue attribution, channel optimization, triggered marketing and marketing can occur more efficiently and reliably than ever before.

Big data is quickly becoming mainstream, and as a consequence, both the tools and associated pricing are becoming accessible to almost everyone. Earlier this week Google launched BigQuery which puts a powerful, straightforward and relatively low cost cloud-based data analysis in the hands of a broader category of companies.

Powered by Google's might, BigQuery's best application is interactive analysis of very large datasets. BigQuery is a SaaS program service that runs on Google infrastructure. It accepts CSV files uploaded from customers via an API. The API uses concurrent compressed streams which allow customers to upload several hundred gigabytes in minutes with analysis that Google estimates is "about 10 times faster than the speed of many corporate data systems." Uploaded data is secure, replicated across multiple data centers and can easily be exported. Data is accessed via group- and user-based permissions using Google accounts.

One advantage of Big Query is its straightforward nature and its ability to keep costs low. Cost is $0.12 GB per month for storage with a 2TB limit and queries are $0.035 per GB with a limit of 1,000 queries per day. Prices are negotiated beyond those limits.

As capital "B" Big Data increasingly becomes small "b" big data, we're going to see even more tools and services that will allow publishers to easily and cheaply find important new insights about their customers and their markets, and that's what makes big data a big opportunity and a big deal.

-- Nancy Ciliberti

To Find Gold, Dig Deep

The travails of the traditional yellow pages industry are serious, with no end in sight. There are some interesting lessons and insights that can be drawn from the remarkable and relatively rapid meltdown of this seemingly bulletproof and impossibly profitable segment of the data publishing industry.

What made yellow pages arguably the most profitable form of publishing ever was the combination of monopoly-like characteristics, coupled with a product that worked extremely well for advertisers. But with every community sporting a yellow pages product, those monopoly-like characteristics became a two-edged sword because, while margins were wonderful, there was little room for geographic growth. For many years, yellow pages publishers contented themselves with eye-popping annual price increases in their home markets. After the AT&T divestiture, there was a huge effort to poach territory from other publishers, resulting in many people finding anywhere from two to ten different yellow pages on their doorsteps. That’s why when the Internet came along, what the yellow pages publishers saw was a way to vastly expand their territories. Forget adding a new market or even a new region. In one fell swoop, they could become NATIONAL. Nirvana!

In reality, this move to become national online publishers was horribly ill-advised. Yellow pages publishers know nothing about content. All those pesky names and address listings they publish? They simply buy them, and view them as a necessary evil, useful only for separating the display advertisements. And this national expansion overlooked the core dynamic of all yellow pages and buying guides: the advertising is the content. By extension, no advertising, no content. Yet with regional sales forces, these publishers had no capability to sell advertising on a national basis, so instead they offered a thin gruel of content: company name, address, phone and general category. Not exactly compelling even in the early dates of the web, and almost pathetic today. The Internet goldmine turned out to be a black hole.

That’s lesson number one. If you are going to produce an information product, that product needs to offer … information. And the competition is keen in the online world where information begets more information that a user can get elsewhere. That’s why the most successful information producers tend to keep a tight focus. Better, deeper, fresher. And the best data publishers are now wrapping software around their content to make it more useful as well. If none of this sounds like yellow pages to you, you’ve gotten my point.

The other useful lesson revolves around momentum. Until very recently, people pointed to the yellow pages as one print medium that while not thriving, was at least holding its own. Yellow pages, some believed, were different and immune to the forces of the web. It’s amazing how quickly that story changed.

That’s lesson number two. Momentum is a powerful thing. Couple it with a strong brand, years of measurable results, a largely unsophisticated advertising base (potentially as many as half of all local business do not yet have websites) and a saturation distribution strategy, and you can appear to defy gravity for a long time. It’s comfortable sticking with what you know, especially when the old way is more profitable than the new way. But when you’re defying gravity, reality will intrude unexpectedly and you’ll hit the ground hard. The smarter path is to engineer a soft landing, not to convince yourself that your market is somehow special and different.

To sum it all up: if you stay focused, dig deep and keep your feet on the ground (making stumbles is a lot less painful than crashing), you’ve already mastered some of the fundamentals to successful information publishing.

To Market, To Market

I have long been interested in the fine line that often divides marketplaces and buying guides, a topic that I am sure keeps all of us up at night at least every so often. A string of recent new website announcements has me back thinking about this again.

As I see the world, a buying guide exists to help you find a source of supply (e.g. rubber gaskets) and a marketplace helps you find a specific item for sale. Buying guides are designed to introduce buyers and sellers. Marketplaces are transactional, designed to get things sold.

Buying guides, which have their roots in traditional yellow pages, tend to be advertising-based. Marketplaces prefer to get paid a percentage of each sale they effectuate. Generally, getting a piece of the action is seen as a much more attractive revenue model than advertising (think eBay). That’s why even old-line yellow pages publishers such as Yell are trying to pivot to become marketplaces. As a general rule though, marketplaces designed for existing markets tend to be highly disruptive, making it hard for them to get traction. Create your own market, however (think Airbnb), and getting traction becomes a lot easier.

And whether buying guide or marketplace, traction determines whether you succeed or fail. All marketplaces and all buying guides need to bring together enough buyers and sellers to be viable. Let’s look at two recent launches:

Archability is a new hybrid buying guide for architectural services. I say hybrid because in addition to directory listings of architects, it also allows buyers to post projects to which architects will respond. This is an efficient hybrid because sellers can get a stream of qualified prospects and buyers can post their needs without a lot of work to identify the architect who meets their exact needs. Critical to any marketplace, Archability stays in the middle of the transaction all the way through (don’t expect to get commissions on transactions you don’t know about), in part through a clever escrow service it offers. And while this is an existing market, Archability isn’t displacing any current industry players, just functioning as a lead generation service, so market resistance should be limited. If Archability can get enough buyers and sellers in the room, this looks like a strong concept to me.

Now consider another start-up, PlaneFinder.com. Got an unused leg on your private jet? Post it on PlaneFinder and sell it to someone. Conversely (just like Archability), buyers can post that they’d like to hop a jet between Point A and Point B on a specific date and wait for a response from an interested jet owner. It’s a useful concept, but I see two concerns. First, PlaneFinder is a marketplace that acts like a buying guide. By that I mean, it makes the introduction and steps out of the transaction. Convenient for all parties to be sure, but not a great way to assure payment. Second, I worry about traction. Aircraft flights are perishable. That makes it even harder to have enough interested buyers and sellers in the room at the same time. And you need a lot of buyers to assure you can move that Boise to Tampa flight leaving on Thursday. Which also means you need a lot of flights, all the time. When buyers and sellers go away unsatisfied, they tend to go away for good. While I like the idea, you not only need a lot of buyers (a given), you also need an extremely large inventory of flights at all times (an unusually steep hurdle).

Lesson learned: for buying guides thinking of adding a transaction side, remember that transactional businesses are different and hard. While the term “marketplace” is widely used and badly abused, you’ve got to have buyers and things for sale immediately; there’s no option of slow growth, results (or lack thereof) are easily discerned, and there is no ability to finesse low participation levels. If you’re up for the challenge, the prize is worth it. If not, maybe a hybrid model is worth exploring.

If the Pipe Fits...

Clay Shirky, the well-known professor at the renowned Interactive Telecommunications Program at NYU, in a recent interview gave this summation of the publishing industry:

"Publishing is not evolving. Publishing is going away. Because the word “publishing” means a cadre of professionals who are taking on the incredible difficulty and complexity and expense of making something public. That’s not a job anymore. That’s a button. There’s a button that says “publish,” and when you press it, it’s done."

You’ve probably heard similar sentiments, though not so succinctly expressed. You may even have had similar thoughts yourself. But is Shirky right?

Conflating the business of publishing with the mechanics of publishing obscures the larger issue of how publishers add value. The one thing that all publishers historically brought to the table and the one thing that secured their role and assured their success was access to an audience.

Traditionally, magazine and newspaper publishers laboriously assembled audiences to which they could sell content, or against which they could sell advertising. Large book publishers for many years held a chokehold on retail book distribution. Broadcast media worked the same way, aided by licensing rules that limited competition. To access an audience, you had to work through a media company.

With the Internet, those walls came tumbling down. Now, everybody has their own audiences through blogs, Twitter and Facebook. Things have swung so far that book publishers now favor authors who have sizable pre-existing audiences of their own. Yes, it’s now BYOA – Bring Your Own Audience. Perhaps more ominously, advertisers are actively working to build their own audiences, and increasingly, are creating their own content as well.

As a consequence, publishers have to look beyond their distribution role to remain viable in this brave new world of information. The good news is that’s there are lots of ways to go. First, publishers have strong brands that are trusted and neutral. That’s a huge asset that can be leveraged. Second, publishers know their audiences. Does the person with 10,000 Twitter followers really know anything about those people? The answer is no, and that makes the BYOA inherently less valuable. Third, publishers can consistently generate quality content, something that is essential to maintaining an audience, and that is a lot harder than it sounds. Fourth, whether it is advertising or paid products, publishers know how to sell against an audience. Not easy or simple.

Bottom line: publishing is changing. The market sinecures many of us enjoyed for so long have eroded. The secrets to success in this new environment are to: a) get a lot smarter about the audience you do have in order to better monetize it (a/k/a audience development), and b) think about how you can help others build and monetize their own audiences (a/k/a marketing services). As an industry, we have to shift our focus from being the pipe to being the pipe-fitter.

Tracking Error

A new report released by the Federal Trade Commission this week makes a strong case for increased online consumer privacy protection. This report builds on the "Consumer Data Privacy Bill of Rights" issued by the White House last month.

The White House document is largely aspirational, setting general goals such as "Consumers have a right to secure the responsible handling of personal data." The FTC report is far more specific, and includes an endorsement of a "do not track" option for consumers, along with a recommendation that "data brokers" be required to allow consumers to inspect the data that have been collected about them.

You'll notice my exclusive use of the word "consumer" above. That's because both these documents only refer to consumers, not businesses. Whether this creates a giant loophole for business-to-business information publishers or a giant swamp of indeterminate liability remains to be seen.

My sense in reviewing both these documents is that they have been fueled by a strong sense of "we don't know what we don't know." These recommendations are not born out of concern about using cookies to better target advertising. Instead, they stem from a concern that marketers and unknown other parties are building huge electronic dossiers on consumers with no restrictions on the use of such information.

None of this is new. As far back at the late 1980s, I worked with databases that held deep behavioral data on consumers. They were built by mashing up information on what mail order catalogs consumers purchased from, information supplied on product warranty cards, information on what magazines they subscribed to, etc. Low-level Census data were overlaid to gauge income and wealth. Even by today's cutting-edge standards, these were slick marketing tools. And they worked. But they didn't create consumer anxiety or outrage. The worst outcome was you might get more mail order catalogs than you wanted.

What's different now is that technology is advancing faster than the ability to govern it. Identity theft is commonplace. Data breaches happen regularly and are well publicized. Reputable software companies plant tracking cookies against your wishes, or secretly upload your address book from your computer. All this works to create severe information anxiety. And we react by trying to regulate the legitimate players, because we can't even locate the truly bad actors.

Certainly the online marketing industry would benefit from greater transparency and some agreed-upon rules of the road. But we can’t throw the baby out with the bath water. Consumers -- and government -- need to acknowledge that all that free stuff is paid for by advertising. Insisting on free content while at the same time rejecting intelligent ad target isn't sustainable. As an astute blogger recently posted, “Dude, if you aren’t paying for the product, you are the product."