VIA Interaction

Thursday, September 18, 2008

The End of Theory

Fascinating article from Bob Garfield in Advertising Age, Your Data With Destiny. Garfield attempts to make sense of where marketing is going (away from mass media) and touches on a topic I have been a bit obsessed with, "The End of Theory" (see Chris Anderson's Wired article with that title for more background).

In short, the collection of massive amounts of data - in our case as marketers, consumer behavior data - makes theory unnecessary. Part of the idea behind Google AdWords and its beta service, Ad Planner, is that we no longer have to use our knowledge and experience to theorize about how to reach consumers; they've told us how to reach them.

Here's an example cited by Garfield [emphasis mine]:

"Now we have the ability to automate serendipity," says Dave Morgan, founder of Tacoda, the behavioral-marketing firm sold to AOL in 2007 for a reported $275 million. "Consumers may know things they think they want, but they don't know for sure what they might want. They're not spending all their time hunting for those things."

Journey to flat-panel purchase
Take, for instance, flat-panel TVs. In 2006 Tacoda did a project for Panasonic in which it scrutinized the online behavior of millions of internet users -- not a sample of 1,200 subjects to project a result against the whole population within a statistical margin of error; this was actual millions. Then it broke down that population's surfing behavior according to 400-some criteria: media choices, last site visited, search terms, etc. It then ranked all of those behaviors according to correlation with flat-screen-TV purchase.

In that list, "shopping online for flat-panel TVs" ranked 22nd -- 18 places below "consumed 'Miami travel' content." Miami travel?

"Not Chicago travel," Morgan says. "Not Europe travel. Not business travel. Don't ask me why. But here's the incredible thing: No. 1 -- and significantly above the others -- was people looking at military content. It made no sense. Then I talked to a friend of mine who had been an officer in the first Iraq war. I said, 'What's going on?' He said, 'That's easy. The kids in the military are huge video-gamers. They get big, fat signing bonuses, and their housing is free. They don't need cars. So they buy big TVs.'"

Morgan followed up because he was curious and felt the need for this counterintuitive association to have an explanation. But he needn't have. Why ask why? The whole point is that data mining takes us to a realm beyond obviousness and common sense. The data speak for themselves.

posted by Tim Beidel at 9/18/2008 03:46:00 PM

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