Long Tail? Big Data!

By using Facebook "Likes", researchers at Cambridge University were able to build astonishingly accurate and detailed profiles of people ... from their politics, to emotional stability, to their parents' marital status. CBC.ca/TheCurrent

Three hours after I [Joel Stein] gave my name and e-mail address to Michael Fertik, the CEO of Reputation.com, he called me back and read my Social Security number to me. "We had it a couple of hours ago," he said. "I was just too busy to call." Time Magazine: "Data Mining: How Companies Now Know Everything About You"

We know more about you than you would care for us to know. Equifax CIO Dave Webb--CIO.com

Scary. The age of Big Data has begun, and we're only now starting to realize that our digital footprint is much more important than we know. The question is, how important is it, and to whom is it important. Privacy laws say they are important to us, but with every user agreement we accept without reading the terms and conditions, we are giving our personal information away, as a currency of sorts, in exchange for some "free" service. And someone, somewhere, is making money off of us.

This is the kind of stuff that advertisers and marketers drool over. Their holy grail, so to speak. To be able to target ads and specifically target customers to such a degree is crazy. Well, crazy to me, but perfect for advertisers and marketers because they can adress customer preference and customize the advertising/marketing so that the user experience is favorable. Ever see ads that are out of context? I once had an ad for bananas on my blog.. I have no idea how or why this happened to this day. Now imagine that the ad is for a new book by your favorite author. Or an upcoming movie, or education, or some other product or service that you are likely to buy based on your digital footprint.

We're talking long tail here and appealing to customer preferences. But, all of this makes me wonder:

• How well do targeted ads really do?
• Will users just keep spending on products that are being advertised to them specifically?
• What is the threshold? At what point do we stop buying and the ads become ineffective?
• Will we all go bankrupt because we buy everything that matches our preferences?

OK, maybe that last one is a bit nonsensical. At least I hope it is! But the questions remain. In their quest to maximise profits, are companies doing so at the expense of their customers? Well, yes because we're paying them because they offer a product or service that we really want. Rather, are we being duped to buy more than we need or outside of our normal buying habits by targeted advertising?

Maybe it's a question of being aware of what we need vs. what we want as consumers and knowing that advertising is increasingly targeted and customized.

Caveat emptor.