Smart data Articles

Smart data is the hard currency of our time

03 Aug 2017

Every day, 16 trillion megabytes of data are produced across the globe. For the individual, the business community and society as a whole, this enormous amount of information is a goldmine — and also a huge challenge. The future belongs to those who can transform and refine big data into smart data. Bisnode spoke with Wayblazer’s founder and Spotify’s Managing Director for the Nordic countries about the hard currency of our time: smart data.

 

Understanding the scope of the amount of data that is produced every day in the world is not an easy task. How much is 16 trillion megabytes anyway? This explosive development might be a little easier to grasp if you consider the fact that 90 percent of all the data in the world has been created in the last two years. This includes information from business transactions, emails, social media, blogs, GPS, videos and digital images.

 

smart data
“Instead of going on gut feeling, a company can instead act based on data. But this requires that you can sift through this enormous amount of information to find what you need. Smart data tries to do just that, to give you the right data at the right time.”

Rikard Candell, Group Business Development Director at Bisnode

Three advantages of smart data

Three advantages of smart data
  • Personalize the customer experience 
    If you really get to know your customers, you can offer them tailored services, personalized offers, better service and interact with them on their own terms. Instead of just going with a gut feeling, you can base your actions on facts from available data. Supported by this data, companies can be more proactive and predict purchasing patterns.

  • Reach the right customers

    More precise targeting allows your company to personalize offers. Traditionally, target marketing has struggled to find reliable information, resulting in generalized clusters rather than clearly defined target groups. But it is now possible to get to know the individuals behind the numbers, to find out who they are and what they are interested in.

  • Reduce risks
    Knowing more about your customers can help you protect yourself against fraud and focus on doing good business with the “right” customers. This results in decreased risk-taking and increased revenues.

Smart data is relevant data

It is hardly an overstatement to say that this information — which we have become accustomed to calling big data — is a goldmine for companies. But how are we going to be able to manage all this information? After all, human brain capacity has not developed to any significant extent over the past 5,000 years.

Faced with all this information, there is a risk that we react like the man who walked into the Barnes & Noble bookstore on Union Square in Manhattan. When he saw the four stories of books stacked from floor to ceiling, he stopped, sighed and said as he walked out,

“So many books, so little time.”

Smart data is about someone taking this man by the hand and helping weed out everything that is not relevant to him. The companies who succeed in this don’t only have an easier time retaining their existing customers, but are also better at precision-targeting advertising campaigns and promotions to new customers. 

“Instead of going on gut feeling, a company can act based on data,” says Rikard Candell, Group Business Development Director at Bisnode. “But this requires that you can sift through this enormous amount of information to find what you need. Smart data tries to do just that — provide the right data at the right time.”

The challenges and solutions vary for different types of businesses.

Smart data in the travel industry

The American company Wayblazer has found a way to use big data in the travel industry. The company’s founder, Terry Jones, doesn’t think that today’s search options are especially user-friendly. Using automated text analysis, Wayblazer can utilize the unstructured information on travel that is available online, in places like blogs, articles and on Twitter.

“Instead of searching for a trip by entering the name of a city and departure and arrival dates like you do now,” says Jones, “you can instead search for a hotel on the beach that has a spa, golf and activities for children in October. We create smart tools that help travel agencies discover the perfect trip for their customers.”

Guidance through the information noise

Jones solemnly announces that Wayblazer and other players have now found the key to the goldmine where huge amounts of knowledge lies hidden.

“I think we are on our way to transforming the internet from being a place where users are forced to fumble through hundreds of pages on a hunt for clues, to a system that really offers guidance,” says Jones and points out that it’s not just about commercial interests. Guidance in medicine and research will also develop faster thanks to smart data. The possibilities are huge, he says.

“Think about the fact that more pictures are now taken every day than were taken during the entire 20th century as a whole, and that one million people log in to Facebook every day. Our communication is not lost. It is preserved. The question is: Can we hear the voices through all the noise? Can we use the tools that are out there to transform this information into commercial insight?” Jones believes that the answer is yes. 

Personalized consumer experience

According to Rikard Candell, one of the strongest trends in smart data is personalization. Consumers are becoming increasingly accustomed to — and will soon expect — unique offers.

“We carry with us the treatment we receive from digital services like Spotify and Uber,” says Candell, “where smart data is continuously used to improve the services.”

“The future belongs to those who can transform and refine big data into smart data.” 

For Spotify, smart data is part of the backbone of the company. Jenny Hermanson, Managing Director for Spotify Nordics, says that the entire analytical team works continuously to analyze data to build a better product, find trends and make personal recommendations.

“The biggest challenge for all companies,” she says, “is that there is so much data that you have to be able to clarify it and find frameworks for what questions you want to answer. You have to take control of the data.”

Hermanson believes that even companies who are not as digital as Spotify will need to relate to the enormous amount of data that is available, or risk falling behind.

“Smart data is about seeing behaviors and trends,” she says, “and to do that, you have to do analyses. But it is also important to point out that it is the combination of data and a human touch that leads to success. The people in the company have to come along on the journey.”

Rapid changes

Many point to the speed of the changes currently taking place. Companies cannot afford to base their knowledge on assumptions and gut feelings. One example of this is Nokia. In the early 2000s, the Finnish company was one of the world’s three leading cell phone manufacturers. Their success was based in part on their ability to quickly see what the market wanted and to develop phones that suited the consumers.

At its peak, Nokia accounted for 3.7 percent of Finland’s gross national product and 21 percent of the country’s total exports. But they underestimated the impact of smart phones, and after Apple launched its first iPhone in 2007, Nokia became out-of-date and marginalized.

“I think that tomorrow’s winners will be those who are more accurate and act faster in their daily decisions,” says Candell. “Strategies are undermined much faster than before and we’re seeing a shift, where the biggest companies have more difficulty holding their market positions over time.

Smart data makes it possible to act on customers’ changing attitudes in real time.”

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