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2014: the year of the data economy

2014: the year of the data economy

Data is the fuel that drives the digital economy. During 2014, we can expect to see more focus than ever on how brands can drive value from data for their own businesses, but in a way that also delivers massive value to their customers.

What we are seeing is a broad transformation from the wasteful, interruptive advertising models of the past to an approach to marketing that is as engaging and empowering for the consumer as it is effective and efficient for the brand. I believe that three interlinked trends in the market are moving us in this direction.

New ways of thinking about privacy

Privacy has always been an emotive issue in the world of digital marketing and advertising. Privacy advocates and many consumers have had understandable concerns about just how aggregators, brands and Internet companies use personal information gathered online for marketing purposes.

But we are seeing a subtle shift now as consumers accept that providing personal information to the likes of Google, Facebook and Microsoft is the cost of the many  free applications and value added services they use in their day to day lives, such as Web mail and social networking. There is an implicit trade of value here – as a consumer I pay a price in data for using a service provider’s free offerings.

That service provider, in turn, will leverage my attention and information for commercial benefit.  As consumers are increasingly  familiar with that value exchange principle, their attention is shifting towards getting the best deal possible for the information they are willing to share with the operators of large Web-based communities.

What I expect to see unfold within the next year is a move by consumers to take more control over their own data and manage it as carefully as they would a currency. They will want transparency from brands and Web communities and services about how their data is used, stored and managed, and they’ll want to be more proactive about  leveraging their data for incentives, discounts and other rewards.

For that reason, look out for a new class of aggregator to rise in the future in the form of intermediaries that help consumers to manage their data and their relationships with the providers of the digital apps and services they rely on.

Everywhere you go, you take your data with you

With mobile technologies such as location-based services, geo-tracking and near-field communications maturing rapidly, they are starting to find a strong role in marketing and advertising. Now, in addition to being able to ask for and infer demographic, behavioural and psychographic data about consumers, companies can also gather real-time information about where consumers are and what they are doing.

In addition to location data from smartphones and tablets, users are also capturing data through wearable computing devices such as the Nike Fuel Band activity and other exercise trackers. Mobile devices and wearable sensors mean that in addition to location data, users can share information about their current activities,  fitness states (heart rate, for example), and more with trusted parties, i.e. Health Insurer.

Of course, this raises some serious privacy questions, in addition to the many benefits it can offer for applications in healthcare, emergency response, and commerce. But if the privacy concerns are managed sensitively and intelligently, such data can be used to  improve the consumer experience while creating efficiencies for companies.

For example, imagine the potential of find-me-deliveries where a Fedex courier can come to your present location to deliver your package from Amazon to you, even if you’re not home or in your office. Or imagine receiving a targeted offer via an SMS or mobile app for a television you’ve expressed interest in when you step into a shopping mall.

Asking permission rather than forgiveness

With new sources of data – mobile technologies, social networking services, ever-more sophisticated tools for gathering and analysing behavioural and demographic data – marketers are suddenly able to engage more with their customers in a personalized manner. But as data about end-users becomes more detailed, organisations need to become ever more responsible and sensitive about how they use and manage customer information.

That means permission-based marketing is more important than ever before. Brands, aggregators and online services must outline in detail to customers which information they would like to track, how they plan to use it, and what the benefits to the consumer are. They should secure permission from customers to use their data for marketing and then show that they treat customer data with respect.

Companies that are able to demonstrate that they use consumer data in a way that benefits their customers will be more trusted and competitive than those that are careless or insensitive in the way they leverage customer information. Their customers will be more engaged, more satisfied and more loyal.

Their relationships with their customers will be ones of dialogue and mutual respect, built on an exchange of value that is beneficial for brand and consumer alike. Advertising will be more precise and less wasteful – and customers will welcome it because it is relevant to their needs.

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