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The gold rush over big data

Often in the online world, a new set of buzzwords like ‘big data’ goes from being something known only in the technology world to something that is mentioned frequently in mainstream media. Like many other technology buzzwords, the reality of big data was happening long before the media hype, and long before the technology world even gave it a name.

A short definition of big data is the analysis of sets of data that are so large or so complex that it is difficult for conventional data analysis tools and techniques to make sense of it all. Because tools and technologies change, what may have been a difficult big data challenge during the era of Apollo missions to the moon in the 1960s and 1970s becomes a middle school science fair project in 2012.

Modern big data problems included weather forecasting and designing search engines. Much of the media hype revolves around big data issues that could result in big profits for private companies. Some, like Michael Fertik of the company Reputation.com, are quite keen on the idea that individuals and companies can benefit from using big data related technology to manage their online reputations.

While the concept of using a third party to manage online reputations may be validated by the marketplace, it doesn’t necessarily mean that a person or a company must pay a third party in order to benefit from big data related technology.

Many of the basic tools of big data are widely available to the public at no charge. The key to making the technology useful and valuable is the skills that are applied when using those tools.

Perhaps the most common example is the search engine. The largest search engines such as Google and Bing cost billions to develop and many millions per month to operate, yet they can be used without charge by anyone 24 hours a day for whatever purposes they have in mind.

Over time, most people who use search engines regularly come up with ways to use search engines to improve their lives or their businesses, and in most cases without paying for an expert or a company to do so on their behalf.

The rush by companies to capitalize on big data related business opportunities has many of the elements that existed in previous booms and busts related to gold, oil, and in the 1990s version of the Internet. Like the gold rushes of the past, some companies will likely become fabulously rich from the gold, many more may become as rich or even richer from activities that support the gold rush, but the vast majority won’t find a fortune and will likely not survive until the next gold rush.

Using video podcasts as reputation builders

While making sales growing profits may be the long term goal of a business, part of that process involves developing a reputation that goes far beyond the customer base. One of the best online media options that individuals and large companies can use as part of the reputation building process is a podcast. Podcasting has been around forever (on the web, that means in the ancient times before YouTube), and can be used to inform, entertain, and especially to build an individual’s or an organization’s reputation at relatively low cost.

Podcasting has changed rapidly over the last few years, especially in the way that a podcast gets used or delivered. In the early days of podcasting, when just about every podcast was delivered by some kind of audio file, iTunes was one of the easiest, most powerful, and free ways for someone to offer both podcast content and an easy means for an audience to find and download that content.

However, podcasting is more than a technology or a distribution channel, it is a process of both creating and distributing content over a long period of time to an audience. A successful podcast increases its audience by making it easier for a potential viewer or listener to interact with that content.

Fast forward a few years, and podcasting is still around, but it takes a different approach to grow the audience and build a reputation. While iTunes is still a great way to get content out to the public, it is just one of many ways to get audio and video content out to an audience. A successful podcaster would use video sharing services like YouTube, as well as social media resources like Twitter and Facebook as part of its online marketing efforts, giving the audience multiple ways to discover more about that individual or that company, and to allow that audience to make an informed decision.

A podcast by itself will likely not be a useful tool for reputation building, but as a integral part of an online marketing effort, it can do a great job of adding a voice or a face to your reputation building efforts. The following video from Reputation.com is one example of how a company can use a video hosted on a third-party site to get its message across.

Decoy marketing

This intriguing article discusses decoy marketing, a tactic marketers use to make their products look better by comparing them to inferior ones offered for a similar price. The author, Roger Dooley, discusses falling prey to this when shopping for shaving cream. First he stares at the shelf, trying to decide between dizzying numbers of options; then he sees that one variety has in its midst taller cans of the same product, but with 20% more for the same price. Instantly he buys, not one, but two of the bigger can, and goes on his way.

What happened? Essentially, his brain was tricked into redefining the situation. Instead of comparing several different products, his mind zeroed in on the very simple decision between products A and B, where they were identical except for the amount of product. This made the decision quick and easy: “B is the much better value!” and once the decision had been made, the other competitors had been eliminated without really considering their merits.

The key element here is that products A and B–the “real” product and the decoy–are almost identical except for the key difference that clinches the sale, in this case amount of product. Gentner and Markman (2006, Psychological Science) explain this forced easy decision this way:

[Comparing items] involves an alignment of structured representations yielding commonalities, differences related to the commonalities, and differences unrelated to the commonalities. One counterintuitive prediction of this view is that it should be easier to find the differences between pairs of similar items than to find the differences between pairs of dissimilar items. This prediction is particularly strong for differences that are related to the commonalities.

In other words, if two items are identical except for a couple of key points, it’s much easier to compare them (and thereby pick the non-decoy). And our brains are lazy. This laziness–among other things–is ripe for marketers to exploit to get us to buy their product. Decoy marketing works by exploiting one of the many shortcuts our brains like to take.

A Rose by Any Other Name

Part of the art of marketing is in repackaging goods and reselling them in hundreds of different configurations. We pay more and more for things we could get cheaper in other forms.

Through advertising, marketing and product placement, retailers and companies play an elaborate game of smoke and mirrors in order to convince us to buy product variations. One fantastic example of this is the new trend towards 100 calories (or that range) candy bar variations.

On a recent shopping trip, I purchased a regular Coffee Crisp and a 100 calorie Coffee Crisp Single. I LOVE Coffee Crisp Bars. The singles were placed in an arrangement close to eye level, with all 100 calorie variations clustered together. The larger, obviously less favored bars were positioned lower and away from their lighter and “healthier” cousins.

The 100 calorie single weighs 19 grams and cost 89 cents where I purchased it. The standard Coffee Crisp weighs 50 grams and cost 99 cents. The standard Coffee Crisp is 260 calories. Now, let me show you a neat trick:

50 grams divided by 19 grams = 2.63

260 calories divided by 1000 calories = 2.60

The proportions are the same. We are paying about two and a half times as much money, for two and a half times LESS chocolate. Is there a reason why we can’t just divide the larger bar into smaller sections? No.

Truth be told, there are people who will eat an entire chocolate bar if they open it. For them, these smaller pieces can be a good compromise. However, if you can manage the willpower and want your chocolate fix, buy the larger one and divide it up. You get just as much satisfaction and all you lose is the packaging.