Data War Intensifies with Google’s Memory Hole and Facebook’s Sentiment Research

Big data war

Data is next oil very prevalent thought in an advertising and marketing industry. It seems that recent controversies around ECJs verdict on Google’s ‘right to forget’ feature (memory hole) and Facebook’s sentiment research have also confirmed that the stage is set for a data war.

Some might disagree with my observation and categorize both issues under ethical code to protect the privacy rights of online users, but looking at following points, I think this is a tussle among authorities, data companies and users to control or own data.

There’s no such thing as a free lunch

Online users with a strong appetite for free services are struggling to control data and however unethical it may sound, users will remain on back foot. And reason is how can we avail ourselves of a free service and not expect Google, Facebook and Twitter to utilize our social interaction data, emotions or gestures to monetize their offerings. The truth is, as soon as we subscribe to a free service, we kind of surrender our fundamental right to control data related to us.

There are ongoing attempts from governing bodies to secure user privacy rights, such as limitation around tracking cookies or strict privacy settings, but there are always stories out there that one way or another users’ data is accessed and used for monetization.

Data ownership and processing have gone beyond legal authorities

For authorities, controlling the flow of information or data is a high priority task and rightly so. The main reasons are ensuring national security, protecting users’ privacy and human rights etc., but the days are gone where government and authorities had big budget, highly advanced surveillance programs to ensure data flow was in their control. Now open source, crowd-sourcing data hosting platforms have made it literally impossible for them to monitor information flow without the support of things like Facebook. For example, Facebook likely to be better than FBI at facial recognition due to its larger photo database. So now authorities are left with no option but to take the legal route and force companies to surrender their data, like the NSA program, or restrict their data, like Google right to reject (Memory hole) or Turkish and Egyptian governments’ stopping Twitter access on their territories etc., but it’s not that easy as here the government might themselves violate data protection laws.

Facebook+ have no option other than manipulating sentiments

Despite unprecedented popularity, social media sites like Facebook, Twitter and Google+ are coming under severe pressure for not driving enough traffic or revenue for businesses, plus users’ appetite for continuous use of free services has forced companies to look beyond display advertising models, doing things such as monetizing users’ interests, sentiments or social graphs.

As a result, in my opinion to appease marketers and show them that they are on top of their game, Facebook recently released results of a sentiment research which they have conducted along with PMAC, to analyze the viral effect of people’s sentiments on their platform, and the results unsurprisingly confirmed that sentiments are contagious, especially when they are negative i.e. if a friend posted a depressing update on Facebook, it might make you feel upset too.

But it all seems to have backfired, as the research has drawn loads of flak from digital rights and privacy experts concerning privacy violation. As a result, Facebook apologized publicly and might be involved in some legal proceedings with concerned parties.

Conclusion: The Data War will intensify from now on

Overall, however you look at it, owning and controlling data is vital but a constant struggle, and in my opinion this stems from users, who have become accustomed to free services and have shown no inclination towards paying for services. Therefore content hosting and providing companies have no option but to use or manipulate users’ data to monetize their services. The authorities can only warn users about data abuse and try to curtail data companies by introducing new laws, but when the buck stops at data, there will always a way for companies to monetize that, and therefore the data war will not slow down. Rather it will intensify from now on.

Twitter Focusing on Big Data & Social Commerce after Ads & Social TV

A recent Twitter annual report showing lower than expected growth of monthly active users, revenue, engagement and timeline views has sent some shock waves into the market, and as a result the share price is over 40% down since its high in November 2013. Also some high profile clients have raised questions on its effectiveness for driving traffic.

So far, if we look, Twitter is focusing more on display advertising products such as prompted tweets and accounts, in addition to TV amplifier, where Twitter is trying to leverage its usage along with TV programs. But we all know results are not promising and clients have shown some concern.

Despite all its criticism, Dick Costolo (Twitter CEO) is very positive about Twitter’s future growth and promised to launch a series of new products and services to boost its revenue and effectiveness for businesses. Let’s look at what these future products could be.

Gnip + BlueFin + MoPub Means Twitter can become Mobile Google AdWords

Last Year Twitter made 11% of their revenue via data licensing and one of the recent developments was that Twitter ended up buying one of their data licensing companies, Gnip. This will give Twitter a more control over how to use their data powerhouse with over one billion tweets every two days and loads of rich media content, link images, video and text.

We should not forget that last year Twitter acquired MIT based data analytics start-up Bluefin, which means they must be looking to combine Gnip data aggregation and Bluefin’s data analysis techniques to provide a more enriching experience to both businesses and consumers.

Twitter also owns mobile ad exchange company MoPub, which means Twitter can offer advertising beyond their platform: imagine, if Twitter analytics could identify the right trends (images, keywords, and videos) from billions of tweets and let businesses target people on a mobile platform at real-time; they could really become Google AdWords on mobile.

Twitter and Amazon partnership shows Twitter inching towards real-time commerce

Last week Amazon announced a partnership whereby users can link their Amazon and Twitter accounts and then add stuff, via tweets, to their basket. It’s a great first step toward the highly anticipated Twitter commerce where whole transactions (including payment) can be carried out on Twitter.

Twitter Amazon Comerce

If we look based on Twitter’s mobile usage and real time nature, there is a huge possibility for Twitter commerce, as businesses can setup a service where consumers can find and buy their products on Twitter. For example, Amex already allows customers to find the latest deals on Twitter in real-time. Our (i.e. Startup TweepForce) client Payasugym lets you find your nearest gym via a tweet and another client (@Socialretail) runs loyalty campaigns purely on Twitter to encourage users to be more engaged.

To sum up, these last two developments (big data and Twitter commerce) look very promising as they go beyond traditional display advertising and can give Twitter an extra edge on their competitors.

Six reasons why big data science is not working for businesses

Recent revelations of phone firms selling their million+ users’ data to public and private companies and also that the Bloomberg News Unit, via their data extraction technology, were tapping secretive information that Wall Street traders use on a daily basis, have reconfirmed that data breaches have become a regular phenomenon and re-endorsed the thought that data is the new oil and that big data science is not working.

But before we look at why data is really the new oil, let’s quickly brush up: is abusing big data the only way for companies to gain a competitive advantage or there are other ways too? The answer is that there are many fair practices that companies can use to obtain customer data, such as offering free services like unlimited mobile phone data usage, free content generation networks (Facebook, Twitter, YouTube) or the use of relatively cheap or free sophisticated content aggregation tools (Digg, Hootsuite). Cloud computing with open source data processing models like Hadoop and NoSQL or social media data aggregators such as Gnip and Datasift have made it relatively easy for businesses to collect all this information and subsequently use it for decision making.

However, despite all these advances we keep hearing every second day that companies are violating data protection laws or using unlawful techniques to get, buy or sell data. Which made us think, as we discuss below, is this sheer greed or there is something missing from this big data science that forces businesses to take an unlawful route?

We have come up with six main reasons which cause or tempt companies to breach data privacy i.e. go beyond normal big data science practices to gain a greater competitive advantage.

1. Data within dark social media cannot be accessed legally

Despite so many open source social media networks, 80% of communications are still done via emails, SMS or private messages apps and this is information that companies cannot legitimately access. This therefore forces them to look at ways of using technology, such as buying cookies or spying on these dark social media tools, to get hold of that information.

2. Inability to de-code intuition or customer buying intent via big data analysis

Many studies suggest that 60% of the time we go with our impulse or 80% of the time we go with word of mouth or else we simply Google when we buy something plus these studies also suggest that the existing technologies are not able to decode sentiments from whatever data we have. This means that, despite having all this social interaction, engagement and sentimental data, companies are continuously looking for real data on consumer buying behaviours and in real life this data is either with Google or within individual companies’ systems. Big companies maintain this valuable data in centralised data storage centres which, despite both digital and physical security, are always prone to data holes or attempts by competitors to break in; this is particularly true for those data centres held in Far Eastern countries.

3. ROI is very low on advertising or subscription models for free data services

We all know that the rationale behind mobile phone companies giving unlimited data usage package or websites such as Facebook, Twitter or Google giving free space to upload images, text, video and audio is to implement an advertising or subscription revenue model based on the back of huge amounts of data collected through these services. However, apart from Google, very few companies really make a substantial amount of money from these models and therefore are forced to look to other avenues to monetise their data. The most obvious route is licensing or selling data, something which is very prone to data law breaches, as in the case of EE trying to make some money by selling their mobile user data.

4. Hacking can still tempt corporates to get big data illegally

Hacking is no longer the hobby of technologists who like to break the code of robust systems to prove their technical superiority, it has become a business where even large corporations have broken into their competitors’ data systems in order to obtain exclusive information and thereby gain a competitive advantage. The recent hacking of the Wall Street trading system, either knowingly or unknowingly, by the Bloomberg News Unit could be categorised as this kind of hacking.

5. The expense of data scientists and processing forces companies to buy cheap data without a sanity check

The abundance of information has created a new breed of scientist and managed services companies who charge businesses a fortune to collect, process and render information for competitive benefits. Few companies can afford to do this and, if they can, it is a time consuming process. Businesses can take a shorter route to obtain this information by buying in data but in the process they usually forget to undertake a sanity check on the source of the information.

6. Inconsistent and loosely coupled data privacy laws create loopholes for data breaches

In practical terms, despite many regulatory bodies, there are no consistent worldwide data privacy and protection laws. For example, Google, Microsoft and many other big companies currently have issues with the European Commission under EU data privacy laws, however, these same companies are running their business in the rest of the world using the same data privacy policies. As another example, in the USA every breach made to an organisation’s system must be reported to the authorities and be made public whereas in countries like India this is not mandatory. In other words, inconsistent laws around the globe mean that companies can be tempted to either obtain or block competitive data from different parts of the world.

Overall, the main reasons for big data privacy breaches are the continuous advance of technology (hacking); a lack of consistent laws internationally; the inability to extract and contextualise big data or to find a way to monetise data collected via free services.

In this open source, crowd funded and cloud storage era I don’t think that the situation is going to improve very soon. Closing the loop, for all the above reasons, is tough and, for the same reasons, I and many others are forced to accept that data is the new oil, causing mayhem everywhere, from Wall Street to top websites, from the banking industry to public services.