317
See also: Finding a profitable niche 22–23 ■ Study the competition 24–27 ■
Gaining an edge 32–39 ■ Forecasting 278–79 ■ The right technology 314–15
DELIVERING THE GOODS
car has braked suddenly or
accelerated rapidly. The collected
data is then sent, via a GPS signal,
to the insurer for analysis. In theory,
Progressive’s use of “big data” will
help them cherry-pick the most
profitable customers in the market—
those with safer driving habits,
who pay their premiums but are
unlikely to make expensive claims.
TiVo, a US company that makes
digital video recorders, has used
“big data” to create a new revenue
stream. TiVo’s boxes are connected
to the Internet. This enables the
business to collect huge volumes
of data on TV-viewing habits at
a relatively low cost. The data is
subsequently sold by TiVo to
advertisers. By correlating this
data with sales figures collected
from barcode readers at checkouts,
retailers can assess the effectiveness
of their TV advertising campaigns.Product development
Netflix, the US media-streaming
provider, has used “big data” to
drive product development. In 2011,
after evaluating the viewing habits
of its 33 million subscribers, the
company decided to remake a BBC
series called House of Cards.
Netflix knew from its “big data”
that it would be wise to spend $100
million on a US version of the show
because the original had been
heavily downloaded. “Big data” was
also used to make production
decisions, including choosing
director David Fincher. Fans of
House of Cards also enjoyed
watching Kevin Spacey movies, so
he was cast in the lead role. ■Internet cookies
Sales figures are an excellent
example of “big data.”
US online retailer Amazon
collects the browsing histories
and purchasing data of its 152
million customers on a daily
basis. Amazon uses “cookies,”
text files saved in a customer’s
browser, which help to track
what kind of items each of its
customers are interested in.
This information is used to
send recommendations that
are likely to appeal to the
customer, and so are likely
to create additional sales for
the company.
Cookies are used to create
a unique ID that stores the
customer’s name, address,
and credit-card number on the
hard drive of their computer.
When a customer returns to
the website, the ID stored on
the customer’s computer is
sent back to the business,
which enables it to identify
the customer and greet him or
her by name. The ID also
enables the online retailer to
recall the customer’s address
and credit-card details quickly,
speeding up the transaction
and increasing customer
satisfaction with the site.It is a capital
mistake to theorize
before one has data.
Arthur Conan Doyle
UK author and physician (1859–1930)“Big data” comprises the
huge amount of information
consumers give away
whenever they use their credit
or debit cards, play games or
browse online, or stream TV.
This information is analyzed
by companies to target their
products more specifically.
Customer
transaction
detailsWeb-browsing
histories of actual
and potential
customersPersonal data
mined from TV-
viewing, video-
gaming, and
smartphonesAttitudes
and values
revealed to
companies
via social
mediaBIG
DATA