This presentation was created for a Google working group meeting which explores the nature of the relationship between the consumer and the Internet. Presented at Google Offices, Berlin June 5th 2015.

1. Algorithms and the technology of
personalisation
Colin Strong
Verve
Consumer & Internet
working group

2. The present time is a very special time in
the history of social science because we
are witnessing a dramatic transformation
in our ability to observe and understand
human behaviour
Duncan Watts, Microsoft
[J]ust as the invention of the telescope
revolutionized the study of the heavens, so
too by rendering the unmeasurable
measurable, the technological revolution
in mobile, Web, and Internet
communications has the potential to
revolutionize our understanding of
ourselves and how we interact
Scott Golder, Cornell University
The data economy is revolutionising
the way we understand consumers

3. We are moving to predicting not just what
you do but who you are:
Correctly predicted :
Home cities 68%
Home state 70%
Time zone 80%
correctly predicted :
Male sexuality: 88%
African-American: 95%
Political affiliation: 85%
Relationship status: 65%
Substance abuse: 73%
Correctly predicted
unique ‘fingerprint’
to 95% of users based
on their movements
Used to infer a wide range of
personal and lifestyle attributes

4. This is moving the lines between our
inner and outer lives (Johari window):
Known to us
Not known to us
Knowntoothers
Notknowntoothers

5. Just to be clear up-front: consumers
do like personalisation:
60%
Would even offer more information
For a service to be better tailored to their needs
Source: PIE Conference 2014

6. But can you have too much of a good
thing?
39%
I currently take steps to
block online advertising
90%
I prefer to do business
with companies that
respect my privacy
69%
I find it creepy the way
that some companies
use information about me
Source: PIE Conference 2014

7. And can consumers manage data
boundaries anyway?
76
Days a typical user would take to do due diligence
for all the websites that they use in a year
$781 Cost, in Bns if US consumers did actually read all the
privacy policies of sites they visit

8. Does over-personalisation lead to an
uncanny valley?

9. We now have empirical support for the
uncanny valley for personalised marketing:
Source: Digital Enlightenment Forum 2014 Yearbook

10. The valley edge will vary – not least by
psychology (e.g. attachment styles)
Our response to approaches by brands
whether in person or via data will,
for example, be influenced by our
attachment styles

11. Falling into the uncanny valley:
negative outcomes
Perceived
Unfairness
80%
It would bother me if I found that
someone else had bought
the same product or service for a
lower price form the same retailer
Perceived
lack of trust
63%
I don't trust companies to use
my personal data appropriately
Consumer
obstructiveness
62%
UK consumers admitting
to giving deliberately
misleading data online
Source: Verve Source: GBGSource: PIE Conference 2014

12. Do we need to start
thinking about this
differently?

13. Are our assumptions about ‘the
consumer’ correct?
Behaviourist view Humanist view
Experts needed to
determine ‘inner life’
You are best placed to
talk about your ‘inner life’
Behaviour determined by
the environment
Understood via
experiments
Behaviour a function of free
thinking autonomous being
Understood via self-
reporting
No need to understand
‘why’ just ‘what’
Need to understand
meaning
Inherently predictable Predictability only within
a range
Nudge Engage
In fashion Hopelessly out of fashion

14. Importance of understanding the
human meaning and experience:
Two thought experiments……
What is it like to be a bat? Mary’s room
Even with the entire physical
database at our fingertips, humans
would not be able to fully perceive
or understand a bat's sonar system
Mary is a scientist who has to research
neurophysiology of vision from a b+w room
via a b+w monitor. What will happen when
she is released from her black and white room
or is given a colour television monitor? Will
she learn anything or not?

15. Because at the moment is it really
working?
0.2%
Click through rate of banner advertising

16. Because at the moment is it really
working?
1.4%
Click through rate of highly optimised
behaviourally targeted advertising

17. Even analysts are uncertain if current
approach is delivering:
I have lost count of the times I have been
presented with some amazing fact that data
has told us through the use of some
incredible new technology, to be left thinking
“so what?” or “isn’t that obvious”?
Caroline Morris Sky IQ

18. Through 2017, 60% of data projects will fail to go
beyond piloting and experimentation and will be
abandoned Gartner
72% of business and analytics leaders
aren’t satisfied with how long it takes to
retrieve the insights they need from data
Alteryx
65% of CEOS think their organisation is able to
interpret only a small proportion of the
information to which they have access
The Economist
Only 27% the executives surveyed
described their data initiatives as
successful Capgemini
And plenty of evidence that we are
struggling:
90% of digital start-ups fail
Mashable

19. What are the options?

20. 1. There is an appetite for
greater engagement:
83%
Would like to
know more about
the information
that companies
hold on me
86%
Would like greater
control over what
personal data
companies hold on
me
77%
Would provide
companies with more
information if I could
be sure they were not
going to share it with
anyone else unless I
gave explicit
permission
Source: PIE Conference 2014

21. More data available if the value exchange
is right:
71%
63%
60% 59% 57% 56% 54%
Helped me to
save money
Helped me to
save time
Received a
service that
was tailored to
my needs
Helped to give
me a better
quality of life
Was offered
more products
and services
that really did
meet my
needs
Helped me to
make better
decisions
Received a
better quality
service as a
result
Basis on which would be willing to
volunteer more personal information to brands Examples :
Source: PIE Conference 2014

22. Without a better grasp of people and their motives,
technological advances may fail to realise their
potential and may be frustrated or blocked
2. Perhaps we need to understand the way
in which consumers behave and think:
Prof David Walker, Campaign for Social Science

23. 3. We need to understand the human
side of the analytics process:
29 different teams of analysts asked to
determine whether soccer refs more likely to
give red cards to players with darker skin
tones.
• Each team was given an identical dataset.
• 21 different sets of variables chosen for
analysis.
• Different teams used different statistical
models.
No surprise that teams came to fundamentally
different conclusions
Subjective judgements are embedded in the way in which we generate,
process and analyse data

24. My questions:
How can we get the right balance between
personalisation and privacy?
Do we understand enough about how personalised
services fit into peoples lives?
Is there enough of an understanding about the
human side of algorithm construction?
Personalisation or a more strategic
understanding of people and markets?

25. Thank you:
Drop me a line
@colinstrong
c.strong@addverve.com
www.addverve.com
www.colinstrong.net
The Personal Information Economy Conference,
London 2014 was a GfK / Ctrl-Shift conference.
Buy the book ;-)