Hundreds of millions from across the world live “in” Facebook. It more directly (regulating behavior) than any government structures and regulates their lives while there. There are of course limits to what Facebook can do. But the limits depend upon what users see. And Facebook has not yet committed itself to the kind of transparency that should give people confidence. Nor has it tied itself to the earlier and enabling values of the internet, whether open source or free culture.
The Future of Business & Communications. Social. Local. Mobile. Cloud. And why Data is the New Oil. Futurist and CEO of TheFuturesAgency Gerd Leonhard was the keynote speaker at the Olavstoppen POL conference on May 3rd 2012 in Stavanger, Norway.
"Data is exploding all around us: every 'like,' check-in, tweet, click, and play is being logged and mined. Many data-centric companies such as Google are already paying us for our data by providing more or less free services. Is data the new oil? TFA CEO Gerd Leonhard leads fellow thinkers Stowe Boyd, Jamais Cascio, and Andreas Weigend in an exchange on where data is going, and how we are going along with it. Data will become a key currency, as it is a virtually limitless, non-rival, and exponentially growing good. Do we need regulations or trust frameworks to deal with it? Can data really be safeguarded in an entirely free-market system governed by commercial interests? What will Generation AO (always-on) share with whom, when, where, and how? And if data is the new oil, how do we avoid wars and global conflicts fought over it...?"
“We live in a kind of digital feudal economy these days. We live on land we don’t own, and we provide the masters of the realm (Facebook, Google, etc.) with unlimited free access to our data and behavior, which they monetize for billions of dollars. We get to keep our little plots of digital land for free and are otherwise pretty much at the whim of the feudal masters.”
- Why Your Personal Data Is The New Oil | DigitalNext: A Blog on Emerging Media and Technology - Advertising Age
Jeff Jarvis said in 2005 (!): "In fact, the act of consumption is now an act of creation. There are so many examples. When I search on Google, I am finding stuff for me but when I click, I am adding to the wisdom of the crowd that makes Google more effective for every searcher who follows me. When I create my iTunes playlist I am also programming my personal iTunes radio station, which I can share; that’s still individual. But when my listening habits join in at LastFM, I’ve now contributed to a collective and that collective pays me back with recommendations (hear Fred on this). When I consume content and want to save it on Del.icio.us or other such services, that’s an individual act. But the tags we create together yield amazing wisdom of the crowd that can be useful in helping people discover content, in organizing the web around topics again, in improving search results, and even in improving ad performance....
I recently was invited to chime in on this snappy collection of 2020-predictions done by Amy-Mae Elliott at Mashable, along with some of my peers and esteemed futurist colleagues such as Ian Pearson, Jim Carroll and Dave Evans. Take a look. Here is my piece:
Connecting the Cloud With the Crowd "By 2020 everything will have moved into the cloud: content, media, health records, education. Connecting the cloud with the crowd will become a huge business. Related to this, access will replace ownership in almost all forms of media. Future media 'consumers' will simply have music, films, TV shows, games, etc. in the cloud, paid 'with attention,' i.e., advertising and data mining (Facebook cloud), subscription (Apple new iTV), and bundles (i.e., with mobile operators). Most importantly, many consumers will not pay for 'content' per se, but for all the added values around the content, such as curation, packaging, design, social connections, interfaces, apps, etc. Finally, all media that is not social and mobile will shrink; all that combines with their current models will prosper."
“The purpose of looking at the future is to disturb the present” (Gaston Berger) was his opening gambit with photos of toddlers using iPads and the comment “these are your future clients” - the AO (“Always On”) Generation. We laughed at more photos where small children walked away from print magazines thinking them broken as nothing happened when they touched the images. His ideas then flowed out fast and fascinated us all.
Empowerment – More iPads than PCs have been sold and tablets can be made cheap and solar powered. The hierarchy of needs must be revisited as young people throughout the world will find money for mobile phones and tablets instead of other consumer goods. The world has shifted from service empires to networks and we are the content. Social media has made broadcasters of us all and the global village is in chaos.
Networked society – We have moved from being in a broadcast environment to being part of the chain of communication. The model is no longer one to many but now many to many. Youtube effectively wiped out MTV in 24 months and is making $36 bn pcm revenues. Convergence means there will be “networked law firms” and the leaders will become connectors rather directors. We will move from hyper-capitalism to hyper-collaboration.
Newscape – Despite all the free information, people still pay to use their preferred print medium. This may be because they trust the source, value the filtering or prefer “packaged news”. It suggests that information providers need to find new ways to add value all the time. Spotify is not about legal access to music – it is about seeing the music preferences of all of your friends. There will be a “tyranny of transparency”.
Control, access and authority – We were urged to consider a number of recent developments – copyright in music, unbundling, NetFlix, ZipCar and peer-to-peer collaboration. There was a nice image of lots of yellow Lego brick model heads all with different faces. He advised of the “loss of default expert” status and said that “sharing is the new owning”. He mentioned the famous McKinsey report which warned those industries that are still trading on information asymmetries (real estate/property industry watch out especially!).
Freemiums – There was a move towards things that “feel like free” – with LinkedIn and Skype and various online games providing free access to allow users to become familiar with and then reliant upon systems before payment was required. The key is to capture large volumes before charging as the value paradigm is changing. Do things for free and get a 50% conversion rate to the next (paying) level.
Nowness – There are new roles in the digital ecosystem – and real time has taken over with virtual services and “hangouts” increasing. He showed a video of a FedEx delivery man throwing a package – to illustrate that everything is observed and recorded. I liked his idea of organisations having “Chief Mavericks”. He said that the law model – where lawyers produce content – will be challenged as it was based on scarcity and we are now in a digital society where information is ubiquitous.
New business models - He then offered some observations on “rethinking the legal business model”, asked us “how visual are you?” and pointed to:
Influence and reputation
New ways to get paid (e.g. Facebook credits, currency for “likes”)
He talked about the changes endemic in moving from a world of “people of the book” to one of “people of the screen” and noted that you cannot outsource creativity, trust and human relationships. And, in what must have been like balm to the lawyers in the room, he said that “trust is the new currency”. He explained that MIT had put its entire course library on line and available to all – yet still received a 38% increase in requests to attend – people don’t want the knowledge, but the experience.
From the age of software to the age of data – Following the mantra of digital PR he asked us how we were monitoring our on-line reputations and said we must move to “data curation” and quoted Umair Haque (HBR) on the need to shift “from value chain to value circles”. He said we are all content businesses, brands who publish and that interaction comes before transaction. Return on Investment is being replaced with Return on Involvement, and commoditisation with collaboration.
To summarise, he mentioned Social, Local, Mobile, Video – and all at speed. That “like economics” will dominate (we need to find new reasons why people come to us), trust the new currency, data the new oil, to consider return on involvement, to seek interaction before transaction and to accept the loss of control. I am sure that I have not done justice to this startling presentation nor its presenter. And while it may seem like a stream of sound bytes, he did provide examples and elaboration (usually with some form of video illustration) of all the points. I have already downloaded his Futurist App. Originally, I had decided that – on reflection – I did not fear the future. And after these talks I decided that I was actually quite excited about the possibilities ahead. Yet I suspect there will be those in the audience who were thinking of that Chinese curse “May you live in interesting times”.
Interesting angle presented by Jaron Lanier below ... Need to retrieve his book "You are not a Gadget" from my Kindle archive again. I don't really buy the point of data-mining and its use in social commerce being questionable, btw - it all comes down to the 'people formerly known a consumers having CONTROL and trusting companies like Spotify and Facebook with their data.
"A recent Twitter post from the account of brand strategist and "media futurist" Gerd Leonhard also evoked the mythical German scholar who made a deal with the devil - with a hash tag no less: #faust. Leonhard was linking to an article about the way ad companies collect data about us through cookies picked up on the sites we visit. "We get free content" wrote Leonhard, "in return we allow data collection." Considering the famously opaque privacy policies routinely published by companies such as Google and Facebook, we might argue that these dotcoms, like Ulmer's Major Krenner, expect a transparency from their users that they would never submit to themselves. When developers of digital technologies design a program that requires you to interact with a computer as if it were a person,” he said, “they ask you to accept in some corner of your brain that you might also be conceived of as a program.” And later, “I fear that we are beginning to design ourselves to suit digital models of us, and I worry about a leaching of empathy and humanity in that process.”
"Google offers free email, word processing, mapping, analytics, video, videoconferencing and much more because they’re selling us to advertisers. The byword these days is, “if you’re not paying for the service, you’re the product.” A few things to love about big data include:
It’s helping solve big problems. Early detection of epidemics. Automated spell-checking. Crowdsourced astronomy. We seem to have entered the Age of Big Data.
It’s creating useful feedback loops. In participatory medicine, people opt in to share data so they can analyze it and continually improve their health outcomes. This kind of feedback is spreading from field to field.
It’s eroding the culture of expertise. Read Daniel Kahneman’s new book and you’ll stick to statistics. Add a pinch of Taleb and you’ll never speak to tie-wearing experts again.
It’s nurturing a culture of collaboration. From participatory medicine to open science and open government, scientists and citizens alike are resetting the terms of innovation.
It’s a major new source of employment.
Ok, maybe not major, but one of the few bright spots on the job horizon is the desperate need for those “data scientists.”Want a taste of what you leave in your wake? Head to I Shared What? and see what Facebook Connect-friendly sites already know about you. Then read up on passive sharing, as well as the Journal’s excellent series titled What They Know. For dessert, read a few posts from IBM’s Jeff Jonas. Then take a sedative...
There’s one last factor that tries to keep me awake at night, which is our very human tendency to believe we know more than we actually know. Thinking, Fast and Slow again does a great job of describing how we systematically overrate our capabilities...In the context of big data, overconfidence can lead people with good intentions to base big policy decisions on faulty logic. We live in an era of soft paternalism, with policy makers eager to bake into policy new default settings for society.
Mostly these are good ideas, but now and then we make big mistakes...Personal data is just the start. The Internet of Things is on its way, also known as M2M, the Many-to-Many Internet. Sensors, transmitters and power sources are getting ever smaller and cheaper, to the point that they will be ubiquitous and sending incessant data streams...
Finally, a few open questions: Will the analysis of big data in marketing really pay off? No studies seem to prove it yet.Will customers get spooked and balk? Or fight back?Will efforts to give customers greater agency take root and take over?Will we make some really big, stupid decisions that we regret later?
A couple of interesting finds in this piece below: a) we should probably be able to prevent even the collection of data online (not just its use) b) anonymity means little in a world where numbers are names, too.
"If a company can follow your behavior in the digital environment — an environment that potentially includes your mobile phone and television set — its claim that you are “anonymous” is meaningless. That is particularly true when firms intermittently add off-line information such as shopping patterns and the value of your house to their online data and then simply strip the name and address to make it “anonymous.” It matters little if your name is John Smith, Yesh Mispar, or 3211466. The persistence of information about you will lead firms to act based on what they know, share, and care about you, whether you know it is happening or not...."
This nice video just went up on my Youtube channel: my entire keynote speech (67 minutes) from the Future with High Speed Broadband Conference in Auckland, New Zealand on February 23, 2012. Topics: Transformational Technologies and Creating new demand for ICT services - The Future of Broadband and ICT -, in detail: the coming telemedia convergence, the future of content in a hyper-connected society, social networks are cable TV without the cable, why open standards are crucial, why and how data is the new oil, how Control is being replaced by engagement and involvement, why sustainability becomes even more important, the shift from egosystems versus ecosystems, the new drivers of Innovation. The slides are embedded below, as well.
"We now live in a digital society, networked, mobile, social and always-on. In this super-noisy, decentralised world of constant self-broadcasting, liking, sharing and networking, how will an artist, a manager, a label or publisher, or any other business get attention, and reach their audiences? If interaction comes before transaction, what does marketing look like in the next few years? How does one build a strong brand in this world..."
When observing the explosive growth of the mobile Internet, the ubiquitous availability of ever more powerful digital devices as well as the global boom in social networking, it becomes patently clear that there is a common economic force behind these trends, and that force is data.
In this hyper-networked society, everyone seems to want to know what we think, all the time, what we like, where we are and who we are connected to. Data (and metadata, i.e. data about data) is quickly becoming a primary force in our digital society, and since successful advertising is forever based on having good data on who is on the other end, the consumer is becoming more powerful than ever before – if he/she opts out of providing data it’s game-over. Never before did consumers wield this much power over marketers; never before could we trade our data for free goods and services in this way (eg Gmail, Skype, LinkedIn, Twitter, Facebook). The quest for data has made us powerful but it has made us dependent on its benefits as well. The Faustian bargain is in full swing.
Some pundits even argue that the only reason advertising in its ‘traditional’ form (a global business worth approx. $550 billion per year) ever existed was simply because we were not yet truly connected, and had no real way to ignore it. Interruption was the game, and the loudest yelling was the best way to sell. Now, with digital technologies in the hand of billions of consumers, we are indeed ignoring what we have no use for, and from our media we expect a lot more than meaningless noise and interruptions. If we provide our cherished data we will expect perfect matches, i.e. a sprinkler system of truly good stuff not a fire-hose of noise.
Because we can now wield data as our currency, we will no longer tolerate interruptions, meaningless pitches, disruptive pop-ups or junk email. Very soon we will be open only for truly personalized offers, real meaning, solid relevance, timeliness, word-of-mouth, and yes, real transparency and truthfulness. It’s all about merit and values that are geared 100% towards us, not to everybody else, or someone else. Our data has become our weapon, and we will barter hard with it. Trillions of dollars of marketing, advertising and public relations budgets are at stake.
Clearly, going forward, if brands and their marketers, the media, and the ads and messages we see do not provide real value we will quickly lock them out of our lives. Useful, data-rich and properly permitted advertising is indeed becoming content itself, and the-people-formerly-known-as-consumers are getting better and better at creating meta-content as well. The power has shifted from the middle to the edges ie to the users, and to the creators (and this is, by the ay, why we have so much upheaval in the content business).
Of course, the key question for marketers still is the same but has just become much more Darwinian: how can you cut the noise, how can you be relevant, be truly wanted (and possibly even loved, like Apple), make a better match, and benefit from meaningful connections? How can you turn the intent of selling into content, into engagement, into mutual appreciation? Is that even possible in the age of digital empowerment? Yelling is dead, and engagement needs permission - a tough but extremely rewarding challenge.
This is where we must consider the enormous value of data, and what it will mean to this new playing field.
Data is now generated at an exponential rate, every day, by billions of users forwarding a link, rating a site, commenting on a blog, tweeting, sharing bookmarks, allowing cookies on their devices, sharing their location, logging into websites, liking something on Facebook. Everywhere we go, everything we do, every move we make around the Net (and soon, elsewhere, as well) creates click-trails, leaves digital breadcrumbs, produces data exhaust, and creates what I like to call meta-content, ie content around content.
In our immediate future are faster mobile Internet access at a much lower cost and much cheaper, yet more powerful and smart, mobile devices, connected devices that are not phones or computers but things, objects and products; computing shifting from tethered computers and mouse clicking to tablets, touch-screens and finger-sweeping; and from downloading to cloud-tapping, which without a doubt will generate seriously more data than ever before, and at an increasing faster rate.
The mind boggles (or, as some would say, it recoils) over the possibilities as well as the challenges. data is the new oil and just like we fought over oil we will fight over data – however these fights will be visible to everyone, and will be fought in public.
Whoever gets to sift through this data, slice and dice it, move it around, make it useful, define its legal and fair use, and somehow make sense of it all, is probably going to be more powerful than Big Oil has ever been. Google, Facebook and yes, Twitter, come to mind immediately.
Something that we must certainly come to grips with is that privacy will almost certainly become something that we must act on to get back, rather than something we attain or retain by mere default. In a way, as Jeff Jarvis likes to put it 'Publicy' is now the default, and privacy is merely an option (and an action item!). Scary thought or huge opportunity? Either way, those powerful new tools of sharing and self-publishing will require that we learn to realize, accept and handle new responsibilities, as well – now that all of us can easily and constantly connect, we also need to learn new limits, new do's and don'ts – and the purveyors of this new power need to help us rather than merely seduce us.
The data that all of us are increasingly generating and constantly spreading as most of us are switching to an always-on mode, will be at the core of all future success in marketing, branding and advertising – and for that alone it's roughly worth $1 trillion already (counting advertising spend, marketing and communication budgets, data- mining etc).
If the future TV does not know who we are, where we are, what we have watched, for how long, who we have shared shows with, what we have commented on, how we rate things, then the marketers' job will become a lot harder, if not impossible. Matches can't be made, relationships can't be forced, brands can't be followed, connections are interrupted.
Getting too little or bad data – or not understanding it – will literally mean running out of gas in the middle of the desert. Therefore, the mission is to keep it all fuelled up. And just like oil, there will be a myriad of issues (hopefully, not wars) that will arise with the responsible and fair practices of drilling, pumping, shipping, refining and dispensing of data. But without a doubt these issues will be solved in due course because this Data-Oil is very potent and because the responsible use of it will light up so many households that a sufficient incentive for problem-solving exists. Telecom companies and mobile operators will want in on this game, as well – afterall, it's their networks that make this all work (for now).
My prediction is that we will see a huge influx of companies dealing with the various aspects of data drilling, shipping, refining and remixing, and that the next Exxon or Mobil may well be a data-slicing company. Hopefully, they will be more ecology minded and sustainable, though. Agencies, marketers and brands need to embrace the challenges and stake out their roles in this new Data-Oil ecosystem.