According to Stephen Baker, the Numerati are taking over. These mathematicians and computer scientists are the focus of Baker’s book, The Numerati, which he discussed last week at Medill. Baker described how our observed behavioral patterns are being turned into quantifiable data by these innovators, and hinted at the vast implications this has for marketers.
“This science is ideal for those industries where you can afford to make a lot of mistakes,” Baker said. That is, marketing and advertising. In practice marketing is a blend of art and science, intuition and analysis. The Numerati can analyze the vast amounts of data and uncover new insights about consumer tastes, preferences, and moods. The use of behavioral data undoubtedly makes marketing more effective than traditional segmentation approaches based on demographics.
Forget about demographic and psychographic targeting. NetFlix and Amazon.com use vast databases that predict behavior and make recommendations based on past purchase behavior. Sometimes the suggestions are misguided, but there is little cost associated with the error. It is certainly more accurate than a strategy based on customers’ billing zip codes.
But these new methods aren’t without problems. People are increasingly protective of their privacy and anonymity, both online and offline. Baker argued that consumers would be more willing to share information if they understand how it benefits them.
The ultimate effects of the Numerati’s efforts in using the staggering volume of available data will be decided by the public’s willingness to trade its privacy for better relationships with brands and businesses – or the government’s eagerness to step in and change laws.
Do you think companies are going too far with your private information?
--Kelly Kross
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Kelly Kross is a graduate student in the Masters in Integrated Marketing Communications program at Northwestern University’s Medill School. She loves her BlackBerry and will never switch to the iPhone. Kelly can be reached at kellykross2010@u.northwestern.edu
