Rolf Skyberg just wrote a “Seth Godin”-like post (his words) I like a lot. He describes why it is so difficult to understand customers on the web, using a real-life example (go over there and read it, it’s good). He writes at the end of the post:
However, if we only construct our customer personas from questionaires we send them in the mail, we are likely missing broad swaths of their personality, goals, and aspirations.
Aggregated action-based data (search data, credit card receipts) can help alleviate this single-sampling problem, but then you run the risk of missing the context, like an Amazon customer who only buys products because she can have them gift-shipped to her nephew.
I’ve written about this phenomenon before too. Every single “web 2.0” company is tracking and tracing us on the web. Every action or interaction related to us is stored on many different servers. And they never forget, which makes social media more dangerous than most realize. This data is analyzed using all sorts of complex algorithms. Sometimes to see if we are up to no good (the government), but more often to see if we can be exposed to advertisement or other commercial propositions (that would be the idiot marketeers from these companies).
I believe this algorithm approach is severely limited. There isn’t a single algorithm out there that can do what humans can. And mind you, we human suck at interpreting other humans. But at least we are able to include contextual and sensory information when we are interacting with others in the physical world. I gave an example of this once when Facebook came with the idea of Beacon and Social Advertisement (remember that?):
The power, according to Facebook lies in the user becoming a brand ambassador towards his friends. The best advice you can get is that from a friend. We all know this phenomenon. You are sitting with a friend and he tells you enthusiastically about a movie he has been too. Makes you want to go yourself, right? Why does that work? Because a lot of things happen at the same time. In the physical world there are many different stimuli that affect your behavior. Things like speech, sight, hearing, touch, feeling, movement, trust, relationships, common experiences or taste, context (like the fact that you are hanging out at your home together), all come together in your brain providing you with a feeling of value to your friends story. It also provides you the opportunity to DISAGREE with your friend.
But in the on-line world you lose most of these stimuli. In Facebook you get flattened stimuli from the newsfeed: “Alex went to this movie and he liked it”, or personalised ads using the profile information.
Every time I read about the successes of applying customer data in a commercial environment (for example to cross- or upsell), I can’t help but wonder who really benefits from it. Amazon is an example that obviously shows that it can be very lucrative to know things about your customers. So in that context there is value.
But how about environments where the data is used indirectly? Take a social network like Facebook as an example. Facebook knows more about you and your friends than any other service out there. They have a huge social graph, the foundation of their over the top valuation. But what good will it do them? How can they monetize that indirectly (through advertisement for example)? It won’t be nearly as effective as the Amazon process. Why? Because at Amazon people buy stuff. They have a clear goal and are willing to perform a commercial act. But in a social network you are not. You are there to have fun, to interact. You are not in the right context for commercial activities. And while you are poking and zombie-ing around with your friends Facebook can’t interpret the contextual information needed to understand human behavior.
There is no “hanging out together, no voice, taste, touch or other stimuli, no easy way of agreeing or disagreeing with friends. Facebook doesn’t know if I had my morning coffee or not (I get cranky), if I feel good or bad. And worse, the data collected there isn’t in the right context. I’m not looking for advertisement.
Doc Searl once pointed me to a quote that pretty much sums it up for me:
In a post called New World Disorder he quotes The Guardian with an article by Jeff Jarvis, Chaos theory: advertising cash will soon decrease,
Advertising is no one’s first choice as the basis of a relationship. For marketers, it’s expensive and inefficient. For customers, it’s invasive and annoying. And targeted advertising is only slightly more efficient and slightly less annoying. Clearly, the direct relationship between a customer and a company is preferable. But that direct connection cuts out the middlemen – that is the media.
You can track and trace all you want, but you’ll never understand me.