The topic of this post has been rattling about in my head for a number of weeks and with some recent purchases and events, it’s been reinforced so I decided to try to get it out there. It’s all about the data. Period. Blogs, tweets, Facebook, online purchases, even Google or Bing searches, Google or Bing maps – all the companies behind these efforts really care about is the data: control the data or the access to it.
Think about it. Internet searches are a gold mine for marketing research. Twitter is now being scoured on Friday nights by movie houses to get an early gauge as to how well movies will do over the weekend (reportedly with 90+% accuracy). Google Maps has opened the doors for advertisements and, if someone was clever, some market research using location-based services (LBS) to determine what offerings are missing in a given geographic area. For example, imagine you see a major renovation of an old stripmall shopping center. The new building will house condos above and retail shops at the street level. Wouldn’t it be nice to know that over the last 10,000 searches in this geographic area, 30% of them were for a Thai restaurant, or a bookstore, or an ice cream vendor? Google is fiercely protecting the data it gathers and almost giving away services (email, online office apps, mapping visualizations, etc.). Other companies do it as well.
Case in point: Apple and the iPod, iPhone, iPad. Unless you have a jailbroken (jailbreaked?) device, everything that you load on these devices comes through Apple in some form or fashion. Everything. Want your pictures on the iPad? Catalog them and sync them via iTunes. Want a new app? Hit the Apple App Store and buy one (which is only available after Apple approves it). Contact lists? Calendars? For the most part (never say never), you go through Apple to manage the data on your device. This is one major reason for the jailbreaking of iPhones and other devices. This isn’t wrong or evil in my mind, it’s savvy. And furthermore, imaging where this could go. This is the hint of the dreams that those that work with LBS hope to realize soon and are starting to come to reality.
The companies and industries to look to the future of how to market, exploit and realize revenue from this will succeed. Those that have trouble (think newspapers) will falter. The transition, which we’re in now, will be interesting as companies will jockey and feel out the marketplace for what it can bear. For instance, the iPad apps aren’t selling as much as many forecasted. There are likely a number of reasons, but I’ll venture a guess on two: (1) the iPad is a different device that hasn’t found it’s niche yet – it’s not a “smartphone” (iPhone) and it’s not a fancy MP3 player (iPod) and it’s more than a fancy PDA (iTouch) and it’s more than a eBook reader (Kindle) so while the apps marketplace is broad, only a few apps are shining through right now. (2) apps on the iPad range from free to $9.99 (at least from what I’ve seen – although I think there’s bundles of apps for more) – maybe $9.99 for a nifty game on the iPad is too much for the market to bear right now. It’ll be interesting to see if Apple or publishers adjust the prices.
Finally, a thought for looking forward. The real question is what to do with all this data. There are simple service providers out there doing simple approaches – showing locations on maps, returning search results, etc. A real possibility for future growth is in conflation services that provide additional value via the joining, analysis or enhancement of these rich data sources. Four Square (also know as when you should break into my house) is a weak example of one such service. Even researchers have started mining public Facebook data looking at trends and data there – it isn’t long until more services are needed or invented by the creative ones. While I haven’t read Mr. Anderson’s book, it seems like he has the same or similar ideas.