Category Archives: Disruption

Lean Analytics: Why is Big Data so Disruptive?

 

Big Data technologies have changed the way we collect data, enabling us to handle infinite amounts of data.

In the old model, with relational databases, you first define the schema for what you collect and then put data into that schema, before analyzing it with BI tools. This is how data warehouse and data mining have been used during decades. You first needed to figure out the question, then you collected the data.

analytics-before

Big Data enables you to change that order. Now, you collect unstructured data first, and you ask the question later.

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Modern analytics start by collecting everything, and then formulating your question.

This is what Alistair Croll explains in his book and in the slides and charts above.

The new paradigm allows you to search for the “unknown unknowns.” In analytics, most good answers will lead to another question. Data driven decisions depend on the ability to ask better questions and then ask again.

Implications for Business

In times of rapid market changes, what differentiates your business is how fast you experiment, how fast you can ask iterative questions and measure your progress, and how fast you readjust your business based on your learnings.

These are the principles behind the lean startup, and behind innovation. The most important metric for modern companies becomes “how fast does your organization learn?”

Big Data changes the cost of making data-driven decisions. It is an enabler for a more disciplined and empirical thinking about innovation and strategy.  In that sense, Big Data analytics becomes one more enabler for disruption.

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Why it is time to kill Digital Marketing

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You will find more statistics at Statista

Digital Marketing and Digital Communications have been so far the little arms of the Marketing and Communications departments.

It is now time to kill Digital marketing and Digital Communications. Because now everyone in Marketing and Communications should understand Digital. Digital is no longer the rare species. Digital is emerging as the future in Marketing and Communications.

The world has changed. Growing kids ignore the once powerful world of print and traditional media. You too can ignore the chart above at your own risk, but Digital is taking over offline media, very quickly.

Many top executives in Marketing and Communications still come from traditional media. Some of them treat their digital teams as those guys that manage this thing they don’t actually understand well and they don’t actually care much.

Some of them still love press clipping from print papers and magazines as their lens to see the world. They need to change or they will be changed.

As the well-respected spanish newspaper director Pedro J. Ramirez put it: “For news, the future will be digital or won’t be.

 

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The iPad’s Disruption Of The Windows PC Market

Windows PC vs iPad
Chart via Horace Dediu

Now we can actually confirm that the day the iPad was introduced, Personal Computing changed forever.

Two years earlier, 2008 was the year of the netbook. Analysts would doubt whether Steve Jobs was right to dismiss netbooks when he insisted Apple would never launch one.

And once a gain his genius was spot on. In 2010 the iPad created a new category that made netbooks completely irrelevant. The rise of the netbook signaled a need for light computers with long battery duration and just powerful enough for everyday use. Now we know the answer was not going to be just a smaller PC.

The inevitable growth of broadband pipes and services in the cloud are a perfect fit for tablets, phablets and smartphones to become a more and more frequent replacement of laptops in our daily life. In emerging markets the leapfrog to wireless broadband and mobile computing is a reality. It will only accelerate the trend the chart shows.

Microsoft has a big problem with mobile and tablets. Windows 8 is a compromise to address tablets and desktops, but it is not working neither of them. Microsoft faces disruption in the personal computing space they used to dominate. Compromises have never worked well in face of disruption.

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Online TV Vs. Traditional TV: Who wins?

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You will find more statistics at Statista

Remember the charts in 2008 showing iPhone’s market share under 5% versus Nokia’s above 50%? Doesn’t the Cable TV chart above remind you to those Nokia charts trying to show that the inevitable won’t happen? And then, it is only a matter of time.

For TV, the shift to online might happen sooner than what a first glimpse at the chart may suggest. If you add Netflix, Hulu, Amazon and iTunes shares on the chart, you get that online TV has already surpassed Cable TV. Yes, data can tell many different stories depending on how you show it.

Internet bandwidth is less and less a bottleneck for online TV to offer the same picture quality as Cable or Satellite. As we get more connected TVs, the difference between traditional and online TV blurs. For live TV, the consumer TV experience is the same whether the signal is carried over a cable, a satellite or an IP connection.

Very soon the only difference between traditional and Online TV will be the technology that carries the signal. While live TV on cable and satellite use a broadcast carrier, live TV for online is unicast.

To a viewer that does not change much. For an advertiser that is a big difference.

– With broadcast, all consumers must watch the same ads. You can only target your ad by understanding what content/TV-show appeals to what demography.
– With unicast, each consumer can watch an unique personalized ad. That means that marketers can tailor their message to the segment of one.

It is not only that marketers could program TV ads with the same granularity as you can program a Facebook or LinkedIn Campaign (e.g. I want my ad to be seen only by male people working for AT&T in Illinois). It is that you could even imagine to personalize your ad with the name of the viewer, or if permission given, with his customer history.

What do you think will be more valuable to advertisers? A mass media ad, like those aired on TV today, or the possibility to target specific niches, and even persons?

That is the hidden power of online TV, and this is what traditional media agencies (and TV broadcasters) don’t want you to know… so that you keep wasting half of your marketing budget.

“Half of the money I spend on advertisement is wasted. The trouble is I don’t know which half.“
—John Wanamaker (1838-1922)

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2 Key Ideas on Marketing Disruption

These are the key points that Brian Solis makes about Marketing Disruption in this video:

1) How to equip marketers to deal with disruption?
The answer from marketers should also be disruptive. That means you should stop looking at the same companies you looked in the past and everybody looked.

By the very nature of the process, if you keep working with the same agencies and companies you won’t be very disruptive.

My comment: I can only agree. Incumbent players tend to protect the status quo and will have a conflict of interest to disrupt themselves. AT&T did not invent Skype, and Time Warner would have never invented YouTube. The disruptive guys are the ones that shake the established model.

A traditional media agency has no incentive to shift your offline dollars to digital.

2) What are the recent Disruptions in marketing?
One of the greatest disruptions is that of consumer behavior. The way I make a decision, how I use technology, where I go and what I share today Vs what I shared yesterday is different and it is changing over time.
“What I do, where I go and how I do it, this is what marketers should pay attention to. This is what should inspire them to get in front of consumers.”

My comment: Having a mobile and being connected everywhere has changed the way people buy, research or share what they like and dislike. This is an opportunity for marketers to better understand their customers. And this is why Big Data Analytics has become the key for marketers to understand the on-going changes in consumer behavior and the opportunities they bring.

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7 Weapons of Digital Disruption

What makes digital so disrupting? These are the 7 traits of digital that may disrupt your industry. Watch out!

Disruption

Disruption (Photo credit: Tsahi Levent-Levi)

1) Zero marginal cost. Digital assets, software apps and online services have virtually zero marginal cost. That is, the cost of any additional sold unit is close to zero.

Case in point: A physical CD, newspaper, book, brochure, paper form, all of them have a cost per item. Copying an MP3, publishing a blog, distributing an ebook, filling an online form have zero marginal cost. Total costs are roughly the same for 1 download than for a million.

Impact: This is the biggest disruptor. This is the enabler of a paradigm-shift business model: freemium. Your revenue comes from a small percentage of paying customers while you give your product for free to millions of users. Why freemium?

  • Free Advertising. The bigger the customer base the bigger impact of word of mouth.
  • You occupy the market to avoid other players in the field. You create your blue ocean as you disincentive other players to enter a market you already serve for free.
  • You get feedback from more customers. That means better insight into customer needs.

The result is a winner-takes-all approach. The goal with freemium is to dominate your space. You rule your own blue ocean.

2) Infinite flexibility. Software is malleable. Unlike product updates in the physical world, in software/digital products, updates have no major impacts. There is no need to change manufacturing lines. Many digital products provide for nearly invisible updates.

Case in point: Chrome release cycle of a major version every 6 weeks is an example of how easy is to keep the product in constant evolution. Users hardly notice.

Impact: That enables the Lean Startup. That is the philosophy behind Agile software development. Years ago building software had waterfall processes that resembled manufacturing. You get requirements, you build it, you test it and you release it. Nowadays it is about shipping the product as early as possible and learn from the feedback. Ship a Minimum Viable Product (MVP) good enough to test the concept with real customers. The insights from your customer are fed into the complete product. That can’t be easily replicated in the physical world. Customers today buy digital products that keep improving well after they purchased them. e.g. mobile apps.

3) Infinite connectivity. Everyone is connected now and everything will soon be too.

Case in point: 79% of North Americans are connected to the Internet. The Internet of Things is just beginning to emerge.

Impact: That means, companies have now more data sources to learn from. That means consumers have access to infinite amounts of information. Social networks have become the way to discover, filter and share information. Today, what is remarkable, spreads like a virus. Marketing has not only gone digital, it has gone social. Never was there the potential to reach so many for so little cost. In the old days, the size of your advertisement budget was a barrier of entry to your market. Those barriers are still working, but are more and more permeable.

4) Moore’s law only accelerates the zero marginal cost of heavier and heavier digital assets, such as video. Moore’s law and cloud computing are also decreasing barriers of entry to play digital, by reducing or eliminating the upfront investment in technology infrastructure.

Case in point: This is one of the forces behind Youtube turning into profits. Serving a 1080i video costs today a fraction of what serving a 240p did cost in 2006.

Impact: Startups don’t need a big investment to launch mass market consumer digital products. Dropbox is a case in point, too. Moore’s law is also partially responsible of the rise of Big Data. Now we can Manage infinite data and get fast insights from it. CIOs, CMOs and an emerging Data Science are all about it.

5) Personalization. This is derived from infinite flexibility. Digital products can be personalized to every single customer. This is mass personalization at virtually zero cost, compared to the physical world.

Case in point: Amazon’s amazing recommendation engine, that always gets to your frontpage those items you like.

Impact: Behaviors, friends behaviors, customer profiling, all is recorded and that makes recommendation and ad engines more and more intelligent. AI combined with big data promise personalized products adapted to each customer and context. From market segmentation, to micro segmentation, to a segment of one.

6) Social Media and Crowdsourcing. The self-service model of supermarkets and restaurants, is even simpler in the digital world. Users will fill in their own data, will review products, and will share to their friends. The crowds create and share content with tribes as never before. Social Media is word-of-mouth on steroids.

Case in point: Paper Encyclopedias released Appendixes units to keep up with updates. Wikipedia is updated in real-time. Second screen: Twitter trending topics are often correlated to TV shows.

Impact: Millions of Facebook users not only personalize their experience, but create content and personalize the experience of their friends. Tripadvisor and Amazon are examples of the fundamental role of customer reviews in the decision to buy. Twitter has become the social soundtrack of TV. That means you need to monitor Social Media proactively. You need to get some clarity from the noise. What they say about your brand will not be so easy to influence with a prime-time expensive ad campaign.

7) Mobility and Ubiquity. Mobile takes the Internet and all your digital assets wherever you are. Smartphones capabilities (cameras, sensors, location, customer info) provide an array of possibilities illustrated by the nearly one million apps available in the App Store and Google Play.

Case in point: Maps applications are replacing standalone GPS devices that were only surviving because of the offline maps. With connectivity everywhere, maps in the cloud become more reliable and up-to-date than stored maps.

Impact: Consumers are more informed than ever. People can check online on the store before to help in the buying decision. They can even ask their friend’s opinions in real-time using their phone cameras. Witnesses to major news end events have become first-line reporters.

Media has already been disrupted by digital. It will not be the only industry. Healthcare, education are next. How many weapons of digital disruption are already affecting your business? Do you have a strategy to defend yourself?

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Why Google gives Android for free?

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You will find more statistics at Statista

The chart already answers why Google gives Android for free.

Google is set to dominate advertisement, in any digital form.

  • Google dominates online, which it is about to surpass print media as an industry.
  • With Android, Google is set to dominate mobile ads, whatever form it may take, beyond search and display. As eyeballs go to mobile, Google will have an advantage position by controlling the OS.
  • And TV is the next one to disrupt. Youtube might be turning to be profitable by now. The experiments in online video ads are beginning to pay off, as it shows the amount of content agreements Youtube is getting into.

Googe wants to control the underlying technology platform, so that whatever evolution digital ads go, they are at the leading edge. Chrome and Android are the most obvious cases. On2, Widevine acquisitions followed the same rationale.

Google strategy to kill competitors is also getting more and more obvious: Give for free the core value of your competitor.

  • Google Apps against Microsoft Office
  • Chrome and Chrome OS, to make the OS irrelevant, as all apps run in the browser.
  • Android against Apple iOS

Digital advertisement, powered by Google, is one of the biggest enablers of the Digital Renaissance. Google enables both publishers and advertisers of any size to benefit from online advertisement. They are one of the biggest ‘patrons of the arts’ for the long tail.

Highlight data points in the chart:
Mobile ads market in US is $4 bn in 2012. Facebook managed to get $339m, even if they just started mobile ads this year.

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