First, let’s start with what Big Data actually is:
By definition, Big Data, is extremely large data sets that may be analyzed computationally to reveal patterns, trends, and associations, especially relating to human behavior and interactions.
What does this actually mean? Everything you do from ordering Steve Madden shoes on Amazon to searching terms on Google, is being tracked. To put it in perspective, more data has been created in the past two years than in the entire previous history of the human race.
Reread previous sentence.
That means even MORE people will be providing information to analyze creating an even more acute and accurate data infrastructure.
How does this affect business?
For a typical Fortune 1000 company, just a 10% increase in data accessibility will result in more than $65 million additional net income.
The revenue that adds to that net income, is you and me. That’s P&G creating an even more accurate profile for individuals. They can pin point when I bought Tide at Target and when I bought Unilever’s Purex at Walmart. They’ll analyze what made me switch and have numbers to support their conclusion. Not only that, but companies can dramatically cut costs by implementing big data. Imagine a world where a retail company know what you want before you want it. Wait… we’re already there?
Currently, retail companies are working out what the popular products will be by predicting trends, forecasting where the demand will be for those products, optimizing pricing for a competitive edge, identifying the customers likely to be interested in them and working out the best way to approach them (hello Facebook ads), ta
king their money and finally working out what to sell them next.
In fact, Target has recently been publicized for knowing a woman was pregnant before her father knew. A lot of consumers buy soap and cotton balls, but when someone suddenly starts buying lots of scent-free soap and extra-big bags of cotton balls, in addition to hand sanitizers and washcloths and vitamins like Magnesium and Calcium, it signals they could be pregnant. Target then can pinpoint by the trajectory of the purchases when the baby is due.
Who else is using Big Data?
There are over 1 billion Google searches everyday – that’s 40,000 search queries every second and 1.2 trillion searches per year.
What does Google do with all of these searches? Well, analyze it of course.
Google can detect flu trends in a given area two weeks before the CDC can, just by analyzing the frequency of key terms in their searches. Google Flu trends then tells the CDC so they can take the necessary preventative measures. What does this mean for you? If you go to the doctor, they will have more staff readily available. The CDC can create a public health response for your area and help curtail the spread of the virus.
Fun Fact: Google got its name by accident. The founders misspelled the word “googol,” which refers to the number 1 followed by 100 zeroes. Who could mess that up!
How does Big Data affect us in ways other than suggestions for our online shopping and diagnosing our illnesses?
Jack Maguire and colleagues at Boston College are largely credited with developing constructs and systems that now help colleges attract and enroll their desired quantity, quality, and diversity of students. Forty years ago, Maguire’s team recognized the need to have data guide the core enrollment management components. They categorized the five components as: “marketing admissions; research and information flow; market prediction; financial aid strategies; and retention and transfer programs.”
The ACT alone provides over 265 data fields through detailed cognitive student demographic (age, gender, family income, etc.) and psycho-graphic (lifestyle activities) information (ACT, 2013). Who would have thought just by filling in those bubbles I was allowing colleges to know 265 things about me!
Here is an example of what Jack Maguire had hoped for at BC:
What do you think is the largest influence on whether or not a student transfers from Boston College?
Using BC data and external sources like the census bureau data, BC was able to identify strong trends — One of those trends being that hometown population density had a very strong correlation to students leaving without graduating. BC can now use this data and other analysis to make changes throughout the school to provide resources that may keep students from leaving or transferring.
Big Data in Government?
On average, public sector government wastes 3 trillion annually by not utilizing big data resources. Is Big Data in government the solution to lazy, underpaid and undervalued government workers? Probably not. But it can help!
The White House has already invested more than $200 million in big data projects. Estimates suggest that by better integrating big data, healthcare could save as much as $300 billion a year — that’s equal to reducing costs by $1000 a year for every man, woman, and child. Don’t you want your government to be as efficient and effective as possible? See this video to learn about what the City of Boston is doing to be a true 21st Century, American City.
What does all of this mean?
Big Data is the future. All of these consumers fear being profiled and labelled but in reality, it’s making the world more efficient. The new generation will overcome the concept of “cool or creepy?” and move straight to “economical, powerful, productive and valuable.” I don’t mind logging into Amazon and having my “Picked just for you” options — frankly, I usually buy some. I don’t mind having the CDC know when I’m sick 2 weeks earlier because of Google. I don’t mind if Target knows when I’m having a baby. Who cares! I’m receiving products that I may not necessarily need but I want. These companies know me better than me and I’m fine with it. Are you?