Data will win the future.
There is not much debate about that point. Look at the large tech companies of the day, they are major collectors of data.
And not just any ole’ data, but data about you.
What you like, what you don’t like. What you view and what you don’t view. What you purchase and what you don’t purchase.
Facebook’s entire business model is built on the back of data. They sell ads against, and they are attempting to sell stock against it. The future of Facebook is entirely predicated on how efficiently they can collect user data – without user push back – and how effectively they can leverage that data to sell more targeted and lucrative advertising.
However, there is one major gap in the data game; the gulf between offline and online data. Which is to say, major companies that sell physical goods are having a helluva time tracing Facebook likes, ad impressions, or comments to actual sales. With the exception of people that have volunteered to be traced by Nielsen or another company, there is truly no way to follow the consumer from their computer, to their TV, to the store. Companies are trying to make this happen, and they are spending thousands to do so. Data is a big money game.
Which is why whatever technology company positions themselves best in the data game, will win the future. And right now, it looks like Google might be that company.
How does Google currently make money? Ads. Lots and lots of ads.
Currently Google, just like Facebook and most tech giants, target their ads based on a variety of factors. Google in particular will tailor ads based upon email content, search queries, and other relevant data they might have about you (namely what you might have provided in your Google+ profile). But even that is not enough data.
Marketers are constantly striving for more targeted, individualized data and information. The more info, the easier it is to custom tailor a marketing message to you. Hence why Facebook is attractive; mounds of data that you voluntarily feed into the system, can be leveraged to craft messages.
But there is still that disconnect between traditional advertising, digital advertising, and actually buying products. That is until Google closes that gap.
Think about some of Google’s latest initiatives; Fiber, Glass, Wallet, and Google+.
- Fiber – Google is currently working to build a nationwide fiber optic network to deliver cable and internet services. Pay Google $120 per month and get all the TV channels they offer as well as fiber internet (speeds up to 1 gigabit down, likely 30 times faster than the internet currently in your home.)
- Glass/Android – Wear Google’s Project Glass around and get the latest information on public transportation, local restaurants and businesses, and anything else you might be staring at. The goal with glass is to provide a wearable technology that will provide you relevant information immediately, without pulling out your phone. Speaking of phones, if you cannot afford glass, or just dislike wearing glasses, you can get an Android phone, and get all the same information.
- Wallet – Pay for your coffee, groceries, and other items with your phone. Just tap it against the NFC censors at the store, and bang! Your product is paid for!
- Google+ – Google’s social network; not quite Facebook and not quite Twitter, it is a mixture of the two in many ways. However, just like Facebook you enter relevant personal information for your profile, and likely provide more information as you interact with the network.
And remember, its Google, they’re not building these four projects for fun. They’re building them to understand more about you; to collect more data. Just think, if you are a Google Fiber user, with an Android phone, you regularly use Google Wallet, and you have a Google+ profile, Google would know just about everything there is to know about you.
They would know the terrible TV you watch, they would know the websites you traffic the most and how long you stay there, they would know where you go (because you are likely using Google Maps on that Android phone) and they would know your basic demographic information that you happily provided to complete your Google+ profile. Oh yeah, and if you use Google Wallet, they know what you are buying and how much you are spending.
From a consumer perspective, this might be frightening. Google has the potential to unlock many details of your life. Will they drill that deep with their information gathering? Who knows, but if they do they will likely keep it anonymous.
But lets focus on marketers for a minute, remember Google makes money on advertisements, not internet and TV subscriptions.
Clearly, Google has an opportunity to break into targeted TV ads with Google Fiber. Traditionally, TV ad slots are sold by the networks, but there has been increasing pressure on TV advertising. People claiming it has become ineffective with the popularization of DVRs and asynchronous viewing. If anyone could sweep in and make TV ads relevant again, it is Google. Not to mention, local cable ad buys are usually done through the cable provider.
So in the future Google could become a one stop shop for search ads, other digital ads (YouTube and websites), and TV ads. There is even more potential in the profile that Google can build about you and present to marketers.
With all of these services, Google could go to a marketer with this profile:
John Doe’s most frequent website is CNN, and we know he was served a Pop-Tarts ad (Google knows this because they are likely serving the ads). Additionally, we know that John Doe was watching American Idol at 9:30pm, and during that time a Pop-Tarts ad ran. We also know that John Doe went to Wal-Mart on the 14th, and spent $97. Let’s pretend for a moment that Google places technology in the NFC software that relays back to Google what John Doe purchases – for the record, there’s no indication they are going to implement this type of software, just trying to draw a picture of potential. Then Google would know that John Doe bought Pop-Tarts.
So all of a sudden, a marketer can look at a consumer profile that indicates what ads the consumer likely saw on what properties, and what they purchased at the store, or at the very least when they went grocery shopping after they viewed the ads and how much they spent.
Additionally, there is demographic information from the Google+ profile, and location information from the use of Google Maps and the Android phone.
That is a marketers dream. That is big money for Google. Massive amounts of personal data, driving highly targeted ads on the web, social, and television. With links back to what you purchased, where you purchased it, and when you purchased it. Major CPG companies, heck any company for that matter, would pay top dollar for that information.
And Google is on their way to gathering it. Will they gather that much personal info and build that detailed of a consumer profile? Probably not. There are admittedly massive privacy issues throughout that entire scenario. However, privacy issues change, people have steadily grown more accepting to giving up personal information, and generally people are willing to do it if it means better advertising.
The important point now is not if Google will do, it is that they have the potential to do it. And across the board, no other company has the potential to collect that granular of data about individuals. None.
That is why my money is on Google winning the future with data.