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e-business
        me-business
        we-business:

How the Social Data Revolution
      Changes the Way
  Consumers Make Decisions

      Digital Day China
    Shanghai, 22 Nov 2011
Why this revolution?
It addresses the 3 deep needs:

 Approval
 Belonging
 Communication
What is the revolution?

Irreversible shift in
mindset of customers
about who they are,
how they relate,
how they make decisions
e-business
      (company focus, Web 1.0)


• Website provides controlled information
• Website possibly allows for transactions
me-business
       (user focus, Web 2.0)

• Consumer in the center
• Self-expression, 晒 (shai, show off)
we-business
    (community focus, Web 3.0)

• Collective intelligence
• The social consumer
Social
Local
Mobile
USA: Who do Consumers Trust?
• Friends: People who like you
  – Offline
  – Online


• Peers: People like you
  – Similar background
  – Similar situation


• Experts
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 | Ads
Source: CIC 2010 Efluencer Survey
Two meanings of “social”


1. Social graph
   Who is connected with whom?


2. Social data
Case study: What data for
  targeting a new phone product?



Traditional segmentation   Connection data
• Demographics             •   Who called who?
• Loyalty
1.35%

          Adoption
          rate
                4.8x
  0.28%




Traditional            Connection
segmentation             data
Amazon.com   Share the Love
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)
Two meanings of “social”


1. Social graph

2. Social data
   Consumer create and share data
   Knowingly and willingly
Purpose of communication:
to transmit information?




               Or is information just
      an excuse for communication?
Nike+


Customers
- engage
- connect
- 3 times per week on average
Corner / Oversized Rooms:
                               Rooms Ending in:

                                              Oversized, Corner Room, Quiet
                                   04         Room

                                              Oversized, Corner Room with North
                                   24         Times Square Views (Higher Floors
                                              are Preferred



Rooms to Avoid:
Rooms Ending in:

 01, 21            Possible Ice Machine / Elevator Noise


 08, 17            Limited View Rooms
Social
Local
Mobile
Local
        Absolute: Place, time
        •   Individual: Identity, History
        •   Aggregate: Insights


        Relative: Distance
        •   To a business: Advertising
        •   Between people: Dating
        •   Between devices: Risk
Location History
Google Latitude
Social
 Local
 Mobile

“SoLoMo”
Mobile
         Context, situation
         •   Sound
         •   Light

         Customers interact
         •   Tag
         •   Scan
Attention                       Situation
 • Clicks, Transactions          • Geo-location
                                 • Device

                   Intention
                     • Search


User generated                  Connection
 • Reviews                       • Social graph
Question:


What is the biggest change
  in the last 5, 10 years
      you have seen?
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
Data = Digital Air
In the last Minute…

10,000,000 Web searches
           Ad requests
           Text messages

 1,000,000 Facebook posts


   100,000 Product searches
           Tweets
Fundamental Shift in Communication

   One-way            Two-way

 Asynchronous       Synchronous

   Planning          Interaction

     List               Flow

    Private            Public
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
Consumer Decision Making
Marketer-generated     Consumer-generated

aware                                 share
         consider         opinion
                    buy use




        Funnel                Megaphone
“Tina Jiang is my go to LV person”
Top 8 Brands (by number of
                    posts)




Source: The Voice of the Luxury (4.5M posts in CIC luxury panel 2011.Q1)
Category (by number of posts)




Source: The Voice of the Luxury (4.5M posts in CIC luxury panel 2011.Q1)
Topic (number of posts)
Content (by number of posts)
Who Can You Get To Work For You?


             100M
           Customers
             100k
           Employees
              100
           Specialists
Company




Customers
Customer


           Product


                     Brand
Product Culture


   Help people make better decisions

   Make it trivially easy for them to contribute

   Give people an excuse to connect


Note: Products/services that use social data improve over time
Take the test yourself http://socialdatalab.com/intelligence
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
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
Ingredients for engagement:


Advertising
Branding
Corporate Communication
Ingredients for engagement:


Approval
Belonging
Communication
Twitter: The Illusion of an Audience?

Two Monologues are not a Dialogue!
1993




“On the Internet, nobody knows you’re a dog”
2011




“On the Internet, everybody knows you’re a dog”
e-business
            me-business
            we-business

      aweigend@stanford.edu
        +86 138 1818 3800
        www.weigend.com

Dr. Andreas Weigend, Social Data Lab

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How the Social Data Revolution Changes the Way Consumers Make Decisions

  • 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. Why this revolution? It addresses the 3 deep needs: Approval Belonging Communication
  • 3. What is the revolution? Irreversible shift in mindset of customers about who they are, how they relate, how they make decisions
  • 4.
  • 5. e-business (company focus, Web 1.0) • Website provides controlled information • Website possibly allows for transactions
  • 6. me-business (user focus, Web 2.0) • Consumer in the center • Self-expression, 晒 (shai, show off)
  • 7. we-business (community focus, Web 3.0) • Collective intelligence • The social consumer
  • 9. USA: Who do Consumers Trust? • Friends: People who like you – Offline – Online • Peers: People like you – Similar background – Similar situation • Experts
  • 10. 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 | Ads Source: CIC 2010 Efluencer Survey
  • 11. Two meanings of “social” 1. Social graph Who is connected with whom? 2. Social data
  • 12. Case study: What data for targeting a new phone product? Traditional segmentation Connection data • Demographics • Who called who? • Loyalty
  • 13. 1.35% Adoption rate 4.8x 0.28% Traditional Connection segmentation data
  • 14. Amazon.com Share the Love
  • 15. 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)
  • 16. Two meanings of “social” 1. Social graph 2. Social data Consumer create and share data Knowingly and willingly
  • 17. Purpose of communication: to transmit information? Or is information just an excuse for communication?
  • 18. Nike+ Customers - engage - connect - 3 times per week on average
  • 19. Corner / Oversized Rooms: Rooms Ending in: Oversized, Corner Room, Quiet 04 Room Oversized, Corner Room with North 24 Times Square Views (Higher Floors are Preferred Rooms to Avoid: Rooms Ending in: 01, 21 Possible Ice Machine / Elevator Noise 08, 17 Limited View Rooms
  • 21. Local Absolute: Place, time • Individual: Identity, History • Aggregate: Insights Relative: Distance • To a business: Advertising • Between people: Dating • Between devices: Risk
  • 24. Mobile Context, situation • Sound • Light Customers interact • Tag • Scan
  • 25. Attention Situation • Clicks, Transactions • Geo-location • Device Intention • Search User generated Connection • Reviews • Social graph
  • 26. Question: What is the biggest change in the last 5, 10 years you have seen?
  • 27. 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
  • 29. In the last Minute… 10,000,000 Web searches Ad requests Text messages 1,000,000 Facebook posts 100,000 Product searches Tweets
  • 30. Fundamental Shift in Communication One-way  Two-way Asynchronous  Synchronous Planning  Interaction List  Flow Private  Public
  • 31. 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
  • 33. Marketer-generated Consumer-generated aware share consider opinion buy use Funnel Megaphone
  • 34.
  • 35.
  • 36. “Tina Jiang is my go to LV person”
  • 37. Top 8 Brands (by number of posts) Source: The Voice of the Luxury (4.5M posts in CIC luxury panel 2011.Q1)
  • 38. Category (by number of posts) Source: The Voice of the Luxury (4.5M posts in CIC luxury panel 2011.Q1)
  • 40. Content (by number of posts)
  • 41. Who Can You Get To Work For You? 100M Customers 100k Employees 100 Specialists
  • 43. Customer Product Brand
  • 44. Product Culture  Help people make better decisions  Make it trivially easy for them to contribute  Give people an excuse to connect Note: Products/services that use social data improve over time Take the test yourself http://socialdatalab.com/intelligence
  • 45. 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
  • 46. 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
  • 49. Twitter: The Illusion of an Audience? Two Monologues are not a Dialogue!
  • 50. 1993 “On the Internet, nobody knows you’re a dog”
  • 51. 2011 “On the Internet, everybody knows you’re a dog”
  • 52. e-business me-business we-business aweigend@stanford.edu +86 138 1818 3800 www.weigend.com Dr. Andreas Weigend, Social Data Lab

Editor's Notes

  1. What drives the revolutionThis is why people do thingsBut before, explain the title
  2. What they buy (that LV bag)Who they do
  3. Illusion of control
  4. Reputation based on traditional institutions?what bestows authority?)Who do we listen to?Past actions? Need for persistent identity
  5. EfluencerKey opinion leaders, main contributors onlineOn average, 55 hours / week online, half of them 8+ hours online / dayBoth social influence and self expression
  6. based on experience, intuition, and data Picture of graph from FosterLeveraging the social graph
  7. 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)
  8. MerchandisingDefine viral marketing10 years agoAmazon vs FacebookAmazon is about products, interactions with store, not with friends. No NewsFeed.Facebook is about interactions between friends.
  9. Information the purpose for communication
  10. 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
  11. https://www.google.com/latitude/b/0/history/dashboard
  12. 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
  13. Data source
  14. 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?)
  15. -  (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
  16. based on economics of communication
  17. DC: Redo, as discussed in ER
  18. 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.
  19. emphasize how different this is from the past
  20. emphasize how different this is from the past
  21. Confusion
  22. This is why people do thingBut before, explain the title
  23. 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.