How wealth sources change the world: Is data the new gold rush?
I spent most of my youth in a small community called South Maitland, Nova Scotia. Established in the late 1800s, its wealth came from adding value to natural resources. The tides of the Shubenacadie River, the highest in the world, meant that a dry dock was not required. This meant cheaper but crucially bigger boats could be built from forests full of hard oaks (durable) and soft spruce wood (springy), cut all winter and built all summer by the same workforce, perfect for the period’s version of just-in-time lean manufacturing. By 1900 timber was no longer the best resource from which to build ships, steel was, and besides a few rusted out Chevy’s there ain’t much of that in good old Southy.
Today launching days are a distinct memory and 90% less people live on the banks of the mighty Shubie than they did 200 years ago. What strikes me about this story and many others across the globe is not the declining industry theme but the change in wealth source from one resource to another. It was a shift that happened quietly, quickly and everyone was completely unprepared.
Today the sources of wealth are again going through dramatic shifts. Broadly speaking human wealth has always come from the natural world, and our ability to capture it and add to it. Much like the story above Australia is not a ‘lucky’ country because of our fair dinkum sensibility, although it helps, we are actually an extremely lucky country because we sit atop a geological bank account. An old piece of rock that is full of wonders like iron, gold, plutonium and rare earths that are in constant demand. Our biggest companies today are still diggers and in FY17 45% of our exports were minerals and fuels.
Compare and contrast
I am sure you have seen it. The Internet meme that shows the change of old companies being replaced by the shiny digital digerati. What gets missed in the meme and the commentary around it is that the shift does not come from a movement towards digital platforms, but comes from how wealth is created. While the new market cap kings are all broadly labelled as technology companies what they all have in common is proximity and unique access to the future source of wealth: data. While far from a natural resource it is quickly reshaping our world in a similar fashion to a good old gold rush.
Those who are closest are more accurate
The new wealth is being built through the data points that we leave behind. In behind the user interfaces we love we leave the gold specks of the new wealth. Whether we are geo-locating ourselves as we search for a new place to eat, searching for a gift during our commute or consuming social media while binge watching, we are now ‘captured’ in the act. Leaving aside the privacy and moral side of this argument, of which there are many, the fact is Amazon, Google and Facebook have no actual control over a natural resource nor do they add value to one. What they do control is a flow of data and boy do they add value to it. Next time your short cut through your neighbourhood seems busier, blame your phone not population growth. This is where wealth is born, seeing the pattern in the data of a few to influence many.
From what we say we are to what we actually do
As brand professionals, being able to ‘see your possible market’ through the tools of segmentation is a powerful tool. We solely exist to build a clear brand image and segmentation helps this distillation by telling you who will most likely engage with your brand and who will not. The gap that any segmentation leaves is in its ability to separate out what an audience says it does versus what its actual behaviour. Because the truth is people lie all the time in market research. Sure, you can close this gap through observational and ethnographical approaches but it still all falls short of Nirvana, being able to accurately predict actual behaviour in relation to the individuals who purchase your brand.
I am sure my energy company knows that I express the desire to reduce my bill based on broad reasons like climate worry and how much it costs and would segment me along these lines. My smart meter likely tells them when we spike in usage but what they miss is my recent behavioural switch from fuel based tools to battery packs and a rediscovered love of country life mixed with big city forgetfulness that’s driving my change in power usage. Do you know who knows? Google sure does judging by the disturbingly accurate ads it serves me. It reminds me of the classic quote, “Your character is what you do when no one is watching.” In this day and age, perhaps a rewrite is in order, “You are what you are and everything and everyone is watching.” I better turn the power off the charger pack.
Targeting an audience versus targeting an individual’s behaviour
Brand sits at the moment in between two masters of truth. It is now possible to move away from the vagaries of the target audience and the equally blunt persona towards analytic tools that help us ‘close the gap’ between intention and actual action. We no longer have to settle for how we think they will behave in real life, but whether our current methodologies are up for this is the challenge.
Like gold, people can get data fever, but we need more creativity and more understanding before we take our share of the new wealth being created. And rather than merely associating data with revenue, let’s use it to tell better stories, build a clearer image for clients, find new tensions to solve and new ways to build our practice through diving deeper into a tangent no one else sees.
Be better to each other.
