Fumes of Data, From the Woods to the Highway

A few weeks back, The Economist published a special report on what it calls the “data deluge” (see the February 27th edition).  In it, the paper introduces the notion of “data exhaust,” defined as “the trail of clicks that internet users leave behind from which value can be extracted.”  According to the author, the internet economy is increasingly being driven by the insights therein.  The article (“Data, data everywhere“) cites as a prime example Google’s use of clickthrough data to match search behavior to relevant results.

data-exhaust

It seems a bit limiting to focus the discussion only on clicks, given that consumer behavior on the Internet can be measured by a multitude of other metrics.  However, Google is indeed a worthy model of this trend.  Take a single search query as a case study: “st patrick’s”.  Each time a user queries this keyword (Google estimates about 3.3 million queries in March 2009), several parallel processes spring into action:

1) Google scans the user’s personal profile and search history to gain a sense of what kind of search results would be most interesting.  Are they looking for details on the parade?  Maybe they feel like wetting their whistle, and want to know about St. Patrick’s Day promotions at local bars & pubs.  Or maybe, for a history buff, the query is about the life of Saint Patrick, and how the holiday is celebrated around the world.

2) The auction for sponsored advertisements begins.  Any advertisers bidding on keywords related to “st patrick’s” are participants, and those with the most relevant ad copy and landing pages (and sufficiently high bids) will get to show their ad on the results page.  It could be a local bar or pub, a general retailer selling green novelty hats, or an auto shop offering a one-day discount on an oil change.

3) The real-time portion of the search engine results page (Google calls it “Latest results”) begins to rotate relevant results from within news sites, the blogosphere, social media, and so on.  They refresh about as fast as the user can blink.

This dynamic presentation of these results amounts to a very rich testing environment for Google.  Every search will yield slightly (or vastly) different results, and once they are revealed, they are hardly static.  If Google has 3.3 million chances in a given month to test various hypotheses on what results should be shown for the keyword “st patrick’s,” it’s easy to see how they can continuously improve the algorithm.  Even after segmenting the audiences by geography, user profiles, time of day, query context, or any of the other criteria around which these tests are constructed… the sheer sample size is undaunted.

Data exhaust does not only benefit search engines.  There are a variety of other contexts in which this type of construct applies:

Publishers – With every action they take, visitors leave a rich trail of behavioral insight behind them.  How did they get there?  Where do they go?  How long do they stay there?  What prompts them to take their next action?  What causes them to leave?  How soon before they come back… and why?  All of these can be easily captured in numeric form.

Retailers – What channels drove the highest quantity of visitors?  The highest quality?  And quality measured by what?  If they buy, what do they buy?  How much of it?  How can they be enticed to buy again?  It’s all in the numbers.

Brand Marketers – What types of marketing communications drive the most awareness?  The highest level of engagement?  The most loyal audience?  The most efficient return on marketing investment (ROI)?  It’s the overlay of data exhaust on the strategic building blocks we call Brand Facets that led us to develop the Digital Brand Dashboard.

Remember the tale of Hansel & Gretel?  Left to starve deep in the woods, they found their way back home by following a trail of pebbles intelligently left behind by Hansel on their trip out.  Evil stepmothers and cannibalistic witches aside, if he had kept using pebbles instead of switching to bread crumbs, he and his sister would have always found their way home.

For marketers, the analogy rings true.  Those pebbles take the form of the multitude of metrics available to marketers through digital media.  Consumers and their wallets await; will marketers find their way out of the woods?

About Paul Burani

Paul Burani - Partner, Web Liquid Group. Connect with me on Google+

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