We had the pleasure of presenting at WOMMnext in Chicago earlier last week on the rise of algorithms and how they affect our understanding of consumer insight. Here are the highlights from our presentation!
Algorithms Are All Around Us
An algorithm in its simplest form is merely a set of rules or steps that are used to solve a problem. In every facet of our lives, algorithms are all around us…from the items we search and find for, to the news and updates we receive from our friends… to even who we meet, date and marry.
Big Data And Computational Power Driving Innovation
We are experiencing a tsunami of data, during which 90% of the world’s data has been generated over the last 2 years and 80% of all of the data is unstructured. This combined with Moore’s Law and the shift to cloud computing has been driving innovation in this area. When topped off with the historical penetration of smartphones, which has allowed everyone to produce consumer content 24/7, these factors have all placed a greater significance on machine assistance and computational power.
The Future Is Bright
Algorithms are improving our ability to gain insight as to our customers and consumers in general via sentiment, tagging, cluster, and influence analysis to ensure more accurate measurement, messaging, and customer insight. Despite all of these metrics, quality is at the heart of understanding the voice of the customer and the goal is to find individuals that have something valuable to say in order to improve products and businesses. Future uses of algorithms in the context of consumer insights include predictives, intent, consumer segmentation, emotions, psychographics, and qualitative ratings, all of which provide even greater insight into the values of consumers. This will lead to more accurate monitoring, targeting and messaging with auto-generated recommendations based on robust modeling of past human interaction with this data. We will begin to enjoy a collective of knowledge that will only enhance our understanding of our customers and consumers and in the end, will be a benefit to all.
Human Involvement Is Still Essential
But even with the rise of algorithms, there will always be the need for a balance between humans and technology. Humans are at the beginning and end of the process, first they create the algorithms and at the end they analyze, recommend, and implement actions based on the output provided by the algorithms. The key is to make sure we are using these new tools to make our lives better and experiences of our customers equally better by driving more accurate insight and understanding of their needs and wants. The Rise of Machines at times seems to be looming on the horizon but we are confident that such advances will only improve our lives versus ruling them.