Data mining in a new age

Bloomberg tries to describe why this tech bubble is different. There are very many implications uncovered in the basic idea that there is a tech bubble based on how to generate click-through ad revenue on websites. Here are a few.

1) mathematics education and ‘why learn math’ – the basis of the technology is in the minds of those who can handle quantitative analysis – the super-gifted in mathematics and statistics. This is the talent not only needed to determine how to create websites with good advertising returns but it is also the skill being used to find terrorists by the military.

Eric Schadt, the chief scientific officer at Pacific Biosciences, a maker of genome sequencing machines, says new-drug discovery and cancer cures depend on analytical tools.

2) the privacy issue online – One the one hand are the companies selling ID theft insurance and legislation attacking web browser ‘cookies’ while, on the other hand, people are joining social community sites to bare their souls and have everything they do and say carefully monitored and analyzed.

Facebook has since turned these insights into precision advertising, the foundation of its business. It offers companies access to a captive pool of people who have effectively volunteered to have their actions monitored like so many lab rats.

3) the anti-business ideological conflict – modern socialism is contemptuous of capitalism and considers advertising as a mental forcing mechanism to cause people to buy whether they want to or not. That appeals to many, especially the younger idealistic set whose number includes some of those mathematically gifted individuals doing the data mining in order to find ways to make advertising more effective and manipulating the user mindset.

Ultimately, ad-tech companies are giving consumers what they desire and, in many cases, providing valuable services. Google delivers free access to much of the world’s information along with free maps, office software, and smartphone software. It also takes profits from ads and directs them toward tough engineering projects like building cars that can drive themselves and sending robots to the moon. The Era of Ads also gives the Wants something they yearn for: a ticket out of Nerdsville

What is missing shows in the bias in the article and its attempt to fit a phenomena into a shoe that might not be a good choice. To call a marketing technique a “tech bubble” that is going to burst like the tech bubble of the turn of the century or even the housing bubble a few years ago is rather a stretch. Marketing always involve exposing people to things they want and that means knowing those people so you can figure out what they want. People will always be seeking goods and services because even food and shelter are goods and services. Quantitative techniques in marketing is simply a matter of having the right tools to make it practical and useful. Once those tools have been invented, both in terms of hardware as well as software, they won’t go away. They will be, and have been, built upon.

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