How the Social Data Revolution Changes the Way Consumers Make Decisions

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  • What drives the revolutionThis is why people do thingsBut before, explain the title
  • What they buy (that LV bag)Who they do
  • Illusion of control
  • Reputation based on traditional institutions?what bestows authority?)Who do we listen to?Past actions? Need for persistent identity
  • EfluencerKey opinion leaders, main contributors onlineOn average, 55 hours / week online, half of them 8+ hours online / dayBoth social influence and self expression
  • based on experience, intuition, and data Picture of graph from FosterLeveraging the social graph
  • based on experience, intuition, and data Picture of graph from FosterLeveraging the social graph“Birds of a feather shop together”Hill, Provost, & Volinsky, Network-based Marketing. Statistical Science 21 256–276 (2006)
  • MerchandisingDefine viral marketing10 years agoAmazon vs FacebookAmazon is about products, interactions with store, not with friends. No NewsFeed.Facebook is about interactions between friends.
  • Information the purpose for communication
  • on averageChange behavior: of individualOf citiesWhy do people do this? They get attention? They get belongingTHIS IS VERY DIFFERENT FROM A SOCIAL MEDIA / TWITTER CAMPAIGN
  • https://www.google.com/latitude/b/0/history/dashboard
  • Lightweight E.g., QR code -- classhttp://www.youtube.com/watch?v=EHlN21ebeakPhone = Proxy for the personCf partner?How do you feel when you leave home without mobile?Playground
  • Data source
  • Data exhaustOther deep questions:What (if anything) does it mean to own data? (Like who owns the air)But: very different properties from physical goods(1) Ideas here: co-creation. I give you one, you give me one, we both have 2.Different for $$.(2) While data is infinitely replicable, money isn’t.No “UNDO” button in fraud (what if someone has spent the money they stole?)
  • -  (airplanes vs cars) emphasize the qualitative difference on social data  - i am NOT talking about transaction data- i am talking about the next quantum leap .         - It is like airplanes over roads. cars are still more important than ever of course, but it is a qualitatively different discussion. And even more important than the current numbers is the growth rateMost important number to measure growth is time to doublingAlso 10M (24 * 60 = 1000) ad requests per minute through the ad exchangeshttp://techcrunch.com/2010/11/16/the-future-will-be-personalized/90M tweets / day90000000 / 24 / 60
  • based on economics of communication
  • DC: Redo, as discussed in ER
  • companies thought they own their customer  switching costs largely gonecompanies thought they own product -> who knows more about my phone: manufacturer? Carrier? … or the web?companies thought they own brand  co-creationcustomers talk about whatever they want to talk about CONVERSATION Ultimately, all about data. Social data.
  • emphasize how different this is from the past
  • emphasize how different this is from the past
  • Confusion
  • This is why people do thingBut before, explain the title
  • Coming soonto a theatre near you:Identity Wars: The Battle to Control Personal DataPersonal data is the doppelganger of the consumer, her very identity as a commercial being. Open the floodgates, as most of the vast quantities of enterprise data generated each day is - one way or another - personal. Data that's transactional, social, local, mobile and on and on.As the leading players jocky for position, control is the name of the game, and the stakes couldn't be higher. We are early in the process of establishing a consumer identity ecosystem, standing on the cusp of major developments. New paradigms will be established and astounding enterprise power stands to be gained. Does anyone own consumer identity data? What precisely does "ownership" of personal data mean? In any case, the objective is not to own the transaction but to control the data it generates. Facebook and Google are central, but dozens of established enterprises and innovative startups are in the game.
  • How the Social Data Revolution Changes the Way Consumers Make Decisions

    1. 1. e-business me-business we-business:How the Social Data Revolution Changes the Way Consumers Make Decisions Digital Day China Shanghai, 22 Nov 2011
    2. 2. Why this revolution?It addresses the 3 deep needs: Approval Belonging Communication
    3. 3. What is the revolution?Irreversible shift inmindset of customersabout who they are,how they relate,how they make decisions
    4. 4. e-business (company focus, Web 1.0)• Website provides controlled information• Website possibly allows for transactions
    5. 5. me-business (user focus, Web 2.0)• Consumer in the center• Self-expression, 晒 (shai, show off)
    6. 6. we-business (community focus, Web 3.0)• Collective intelligence• The social consumer
    7. 7. SocialLocalMobile
    8. 8. USA: Who do Consumers Trust?• Friends: People who like you – Offline – Online• Peers: People like you – Similar background – Similar situation• Experts
    9. 9. average(1-10 scale) | China: Credibility 8.5 | Friends and family 8.0 | Internet word of mouth 7.0 | News and authorities 5.3 | Sales person 5.0 | AdsSource: CIC 2010 Efluencer Survey
    10. 10. Two meanings of “social”1. Social graph Who is connected with whom?2. Social data
    11. 11. Case study: What data for targeting a new phone product?Traditional segmentation Connection data• Demographics • Who called who?• Loyalty
    12. 12. 1.35% Adoption rate 4.8x 0.28%Traditional Connectionsegmentation data
    13. 13. Amazon.com Share the Love
    14. 14. Result: Amazing conversion rates since customer chooses Content (the item) Context she ( just bought that item) Connection (she asked Amazon to email her friend) Conversation (information as excuse for communication)
    15. 15. Two meanings of “social”1. Social graph2. Social data Consumer create and share data Knowingly and willingly
    16. 16. Purpose of communication:to transmit information? Or is information just an excuse for communication?
    17. 17. Nike+Customers- engage- connect- 3 times per week on average
    18. 18. Corner / Oversized Rooms: Rooms Ending in: Oversized, Corner Room, Quiet 04 Room Oversized, Corner Room with North 24 Times Square Views (Higher Floors are PreferredRooms to Avoid:Rooms Ending in: 01, 21 Possible Ice Machine / Elevator Noise 08, 17 Limited View Rooms
    19. 19. SocialLocalMobile
    20. 20. Local Absolute: Place, time • Individual: Identity, History • Aggregate: Insights Relative: Distance • To a business: Advertising • Between people: Dating • Between devices: Risk
    21. 21. Location HistoryGoogle Latitude
    22. 22. Social Local Mobile“SoLoMo”
    23. 23. Mobile Context, situation • Sound • Light Customers interact • Tag • Scan
    24. 24. Attention Situation • Clicks, Transactions • Geo-location • Device Intention • SearchUser generated Connection • Reviews • Social graph
    25. 25. Question:What is the biggest change in the last 5, 10 years you have seen?
    26. 26. Social Data Growth is EXPONENTIAL The amount of data a person creates doubles every 1.5 years • after five years  x 10 • after ten years  x 100
    27. 27. Data = Digital Air
    28. 28. In the last Minute…10,000,000 Web searches Ad requests Text messages 1,000,000 Facebook posts 100,000 Product searches Tweets
    29. 29. Fundamental Shift in Communication One-way  Two-way Asynchronous  Synchronous Planning  Interaction List  Flow Private  Public
    30. 30. A. Production: Everybody creates data.B. Distribution: Everybody shares data.C. Consumption: Everybody uses data. •  The study of the consumer has changed •  The consumer has changed
    31. 31. Consumer Decision Making
    32. 32. Marketer-generated Consumer-generatedaware share consider opinion buy use Funnel Megaphone
    33. 33. “Tina Jiang is my go to LV person”
    34. 34. Top 8 Brands (by number of posts)Source: The Voice of the Luxury (4.5M posts in CIC luxury panel 2011.Q1)
    35. 35. Category (by number of posts)Source: The Voice of the Luxury (4.5M posts in CIC luxury panel 2011.Q1)
    36. 36. Topic (number of posts)
    37. 37. Content (by number of posts)
    38. 38. Who Can You Get To Work For You? 100M Customers 100k Employees 100 Specialists
    39. 39. CompanyCustomers
    40. 40. Customer Product Brand
    41. 41. Product Culture Help people make better decisions Make it trivially easy for them to contribute Give people an excuse to connectNote: Products/services that use social data improve over timeTake the test yourself http://socialdatalab.com/intelligence
    42. 42. Data Culture Do not have  Somewhere already Cannot get  Can! User will give Must not use  Embrace it Be secretive  Be transparent Information  Information asymmetry symmetry
    43. 43. Company Culture (“DNA”) 1. Facebook Designed for contribution and distribution 2. Google Take whatever you can get 3. Amazon Customer-centric: Help them make decisions
    44. 44. Ingredients for engagement:AdvertisingBrandingCorporate Communication
    45. 45. Ingredients for engagement:ApprovalBelongingCommunication
    46. 46. Twitter: The Illusion of an Audience?Two Monologues are not a Dialogue!
    47. 47. 1993“On the Internet, nobody knows you’re a dog”
    48. 48. 2011“On the Internet, everybody knows you’re a dog”
    49. 49. e-business me-business we-business aweigend@stanford.edu +86 138 1818 3800 www.weigend.comDr. Andreas Weigend, Social Data Lab

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