Platt Perspective on Business and Technology

Connecting into the crowd as a source of insight and market advantage – 2: considering the inventory of channels and connection points

Posted in macroeconomics, strategy and planning by Timothy Platt on May 14, 2012

This is my second installment in a series on connecting into the crowd as a source of insight and market advantage, but with an important difference – doing this in ways that explicitly allow and support measurement of costs and of value returned. I began this discussion in Part 1 by laying out a basic framework as to how web analytics have evolved, from the initial crude metrics of eyeball and sticky eyeball counts to the more complex and robust sets of analytical metrics that are in use today – but that are still primarily if not exclusively rooted in the Web 1.0 context with all of its assumptions and limitations.

The online experience for both businesses and the consumers they would reach out to, has changed and in radical and even revolutionary ways with the advent of the fully interactive online experience, with both Web 2.0 and the increasingly pervasive social media experience, and with elaboration of an increasingly pervasive and comprehensive suite of new online channels for connecting, sharing and creating. One of my earliest postings to this blog, Business and Convergent Technologies 17 – 1000 points of light: the proliferation and evolution of interactive online options listed hundreds of interactive online options, available to and actively in use by the online public and for both creating and sharing an information-rich online community experience. Some of the specific resources listed there are no longer in service, either because the companies that offered them have failed or because they have been bought out with their tools and connectivity and sharing channels folded into other, larger systems. But for every one that has disappeared, either entirely or as a separate channel and entity, many new ones have come online to take their place.

Just to pick up on two areas of growth since my 1000 Points of Light posting of December, 2009:

• The range and scope of instant messaging options, both as stand-alone apps and as components of larger software packages has grown tremendously, and with increasing availability of instant messaging apps for handhelds, this approach to interactive online has become fully mainstreamed. Twitter and other early players in this field are for the most part still there and very successful as businesses, with upwards of hundreds of millions of participants posting, and reading and following posts daily. This aspect of the overall online communication has done a lot to make interactive online truly ubiquitous, and for many aspects of it as an increasingly mature technology.
• The explosive growth of crowd sourced online review options has been at least as profound, and with both stand-alone review sites such as Yelp, and with increasing numbers of businesses realizing they need to give their customers this option for public sharing of feedback too. Businesses that sell online increasingly have to offer their customers the option to both rate the products they sell, and read the reviews and experience sharing of others who have purchased and used those products – favorable or otherwise. And in this, businesses have increasingly come to realize that their customers and potential customers will seek out and find reviews on whatever they offer, so they might as well embrace this and be part of the conversation too.

Interactive online is real, it is compelling, and any business that seeks to compete and thrive online has to understand it and accommodate it – and for real success, businesses have to embrace it and find ways of creating value from it and both for their customers and for themselves.

Right now, as of this writing, metrics that would track the online conversation and its impact are still pretty much at the eyeball and sticky eyeball count stage. And I repeat a point I made in Part 1 of this series as to them: reliance on those early web site visit-count metrics and assumption that they measured monetizable value, significantly contributed to the build-up and bursting of the first big dot-com bubble.

Rather than simply counting the interactive online messages that go through a web site or other business online channel, or that reflect upon it, and rather than simply counting the ratings, and by score for product and service value and for crowd opinion of the business and its practices, businesses need standardized metrics tools for determining the monetizable value of this interactive conversational flow. And the forms and types of data derived need to feed directly into the decision making process – the data derived from these new metrics should be actionable.

Right now, monetizable value obtained is more ad hoc than standardized and that leads to some very significant limitations:

• This limits the business to sampling the conversation flow and in non-standardized ways, so the sample data studied cannot be used as reliably or fully as it should be in statistically modeling the entire online business and its processes and performance.
• These samples do not provide information about the performance or the market acceptance and strength of the entire inventory.
• Ad hoc sampling can easily focus on outlier participants who are not representative of the marketplace as a whole. This can be misleading. But in an interactive online context, those outliers can also be strong influencers. Many review sites and review functions and features in business sites seek to capture the influence value of reviews, and by extension of reviewers by asking review readers to rate the value they see in the reviews they read. This is a move in the right direction. But better automated and intelligence-based systems and analytical processes are needed to more fully capture the value inherit here.

I am going to more explicitly turn to the issues of interactive online metrics themselves in my next series installment, building from this discussion of the increasingly complex array of resources that consumers connect and share through.

You can find this and related postings at Business Strategy and Operations – 2 (and also see Business Strategy and Operations.) You can also find this at Macroeconomics and Business.

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