The “Gold” of the Information Age

Abstract

A report by the World Economic Forum in Davos, Switzerland in 2012, recognized “Big Data” to be a completely new class of economic assets, much like gold and currency (Lohr). Big data is becoming as valuable as gold to large companies and governments around the world in the “Information Age” of the 21st century. During the California Gold Rush of 1848, thousands of people moved to California from 1848 to 1855 in hopes of finding gold and becoming wealthy. The gold rush sparked the American economy due to the vast amount of laborers and gold being acquired on U.S. soil, which helped fuel the United States through the Second Industrial Revolution. Today we are experiencing the “Rush of Big Data” around the globe. Thousands of businesses, such as Google, Yahoo, and IBM are using large quantities of data in order to create new products and markets for consumers. The “Rush of Big Data’ is fueling the Information Age of the 21st century, and causing major impacts on businesses and economies all over the world.

The “Gold” of the Information Age

Business use big data by taking enormous amounts of information from ordinary consumers- nearly 2.5 exabytes (1018 bytes) a day- in order to predict trends in their customers so that they can advertise their products more effectively and manage their business more productively (Frank). In an interview with IBM’s Vice President of product marketing, Eric Sall, he stated: “The better you understand your customer, the better you can serve that customer, and the better you can retain that costumer and get more revenue from them.”  Big data allows companies like IBM to understand their customers better in order to make more money from them. In 2010, the big data industry was worth more than 100 billion dollars (Taylor). The chart below shows the percentage of sales and productivity increase of different industries that use big data in 2010 (Taylor). The retail industry alone saw an increase in sales by 9.6 billion dollars. The amount of revenue that companies can obtain by using big data is causing a major shift in all aspects of business around the world. Although these changes are fueled by increasing revenue, they are having a positive effect on the ordinary consumer by allowing them to interact with businesses on a whole new level.

     Big data in industries

One of the most prominent shifts of business in the 21st century is their emphasis on product marketing. By using big data, companies are beginning to understand their customers better,  allowing them to market their products more effectively, and interact with their costumers. For example, Amazon collects information based on your recent search query and purchases in order to recommend different products to specific users based on what they enjoy. The image below shows the items Amazon is currently recommending to me. I recently bought new volleyball shoes, therefore Amazon is giving me a list of volleyballs and other shoes to purchase. They are exposing products that are more relatable to me, their customer, rather than wasting an advertisement on something I will never purchase. This influences customers to continually return to Amazon to buy products, because they keep advertising the vast array of products on their site, which leads to more revenue for Amazon.

Amazon recommendations

Google, one of the most powerful big data companies in the world, uses this advertising scheme on a much larger scale. Google has created integrated user-friendly accounts such as Gmail, YouTube, Google Plus, and of course, their search engine, in order to collect tons of information about their users. The chart below shows the increase in Google Plus accounts from 2011 to 2012 (Finn). The amount of people using Google’s products are staggering, and Google can link your Google Plus account to all your other accounts in order to create a “resume” of information about you. Google collects enough data on its consumers to understand their characteristics, habits, and most importantly, their interests. This allows costumers to interact with Google on a whole new level, increasing their user experience. Then, Google can use highly advanced algorithms to match up companies to potential customers (Marr). Companies pay Google a lot of money for their data in order to effectively market their products. This is how smaller companies and large corporations can increase their advertisements in order to gain popularity and increase sales. Google is an example of an entire company that is based on collecting big data, and it is currently one of the most successful companies in the world.

Google + accounts

Another example of these companies would be Target Corporation.  Target has a number of professionals who do studies about consumer habits and company statistics. In the article “How Companies Learn your Secrets,” Andrew Pole, an employee for Target talks about what he does on a daily basis (Duhigg). His job was to use Target’s purchasing history to find people with children in order to send them toy catalogs, or find shoppers who habitually purchase swim suits and send them coupons for swimsuits and sunscreen. But even more importantly, he tried to find the moments in consumers lives when their shopping habits became flexible. Then he  sent them the right advertising to get them to spend money (Duhigg). By analyzing all this data from consumers, he is able to reach out to customers on a personal level, and market Target’s products a lot more efficiently than other competitors.  The image below shows a Target advertisement that is directed towards football fans. Target would send this advertisement to people who are known to be football fans, in order to get football fans interested in Target’s “deals.” This is an effective way of marketing products to specific audiences, which gains more exposure for your business, and has a positive effect on their costumers.

Target Advertising

These companies are trying to enhance the interaction with costumers by marketing their products more effectively, but the only way to collect information on customers is to have them interact with your products, therefore they must be satisfied with what you have to offer. If millions of people didn’t use Google’s free services such as Gmail, YouTube, or Google Plus, then Google would not be able to collect information on consumers. The way to keep people interested in your products is to keep them satisfied. The image below shows the Gmail interface on my Google account. The app is very convenient for consumers for a number of reasons. As you receive emails, they are automatically filtered into your primary inbox, social inbox, or promotion (spam) inbox. Also, other Google applications are easily accessible and you can easily search your mail with the task-bar at the top of the screen. Google creates these “costumer savvy” products in order to keep their consumers satisfied, so Google can keep collecting and selling information on them. This is great for the company, but it is also great for the costumers, because they get free access to these great technologies.

Gmail interface

Nearly all businesses in the modern market are striving to satisfy costumers. Big data is allowing these businesses to find out what satisfies costumers more in order to attract them to their products. Apple, one of the leading producers in innovative technology, analyzes big data in order to enhance their applications so that they are more user friendly (Van Rijmenam). By creating a user friendly environment in their products, customers keep returning to Apple to purchase this technology. When Apple released the first iPhone in 2007, the gadget was so revolutionary because your music, phone, and internet browser were all connected on the same device, with a simple user interface, which is shown in the image below. Apple accomplished this by analyzing feedback and information from current “smart phone” users in order to create the device that people wanted. This gave Apple an advantage in the market, attracting millions of people to the new iPhone.

iPhone 1st gen

Another major shift in business is occurring  within the companies itself. Because of big data, businesses are beginning to focus on the ways they can improve themselves. Consultants analyze the vast number of systems taking place in a company and use this big data to help the company make better decisions moving forward. A company that excels at this is IBM, one of the leading software companies in the world. IBM has always focused on computers and software, however in recent years, IBM has transformed their company into a world leader in “big data analytics” (Versace). IBM analyzed ways to improve their company, and decided to invest heavily on resources to become a company that excels in the collection of big data. A lot of smaller businesses are changing in order to compensate for the influx of big data as well. Smaller companies use the big data services provided by Google and other companies in order to market their products better to gain more exposure and recognition.

Craig Mundie, Senior Advisor for Microsoft said: “Big Data is becoming the new raw material of business,” and just as the discovery of gold launched the world into the “Second Industrial Revolution,” the discovery and enhancement of big data will continue to fuel business in the “Information Age” of the 21st CenturyAs big data continues to increase in business, consumers will become more satisfied with their products, causing a positive effect on society.

Works Cited

 Duhigg, Charles. “How Companies Learn Your Secrets.” The New                 York Times, 16 February 2012. Web. 24 October 2014.

Finn, Greg. “Google + Reaches 100 Million “Social Network” Users.”           Marketing Land, 18 September 2012. Web. 3 November 2014.

Frank, Christopher. “Improving Decision Making in the World of                   Big Data.” Forbes, 25 March 2012. Web. 24 October 2014.

Lohr, Steve. “The Age of Big Data.” The New York Times, 11 February         2012. Web. 24 October 2014.

Marr, Bernard. “WOW! Big Data at Google.” Smart Data Collective,               23 June 2014. Web. 28 October 2014.

Taylor, Anthony. “How Can Your Small Business Take Advantage of           Big Data?” Strategy Management Consulting, 9 April 2012. Web.               24 October 2014.

Van Rijmenam, Mark. “Will Apple Re-invent Big Data?” Big Data                   Start-Up. n.d. Web. 3 November 2014.

Versace, Christopher. “Talking Big Data and Analytics with                               IBM.” Forbes, 1 April 2014. Web. 3 November 2014.

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