Businesses making sophisticated use of online audience data are gaining significant advantages, according to a report from innovation foundation NESTA.
In the Rise Of The Datavores, authors Hasan Bakhshi and Juan Mateos-Garcia suggest that these intensive users and analysers of data make up around 18% of businesses with an online presence in the UK.
They make up a significantly smaller proportion of business than the 40% that the study suggests are merely casual users of data.
But the report suggest that datavores are gaining serious advantages, through analytical techniques, including data visualisation (dashboards), data mining and controlled trials and experimentation.
The report explains techniques and developments but suggests that the smartest businesses are turning knowledge into business practice, often leading to retraining and restructuring.
To use increasingly popular jargon, datavores are often part of ‘Data–Driven Companies’ (DDCs), following ‘Data–Driven Decision Making’ (DDDM). This is used in contrast to ‘XDCs’ (Experience-driven companies), which are much more influenced by experience and intution than data.
Of the 500 companies surveyed for the report, media and communications companies were leading the way, perhaps because of the access to real-time evaluation of demand in areas such as television, and of the imperative in being able to attract new kinds of advertising and marketing revenues.
The authors acknowledge that this is an emerging field with techniques and technologies evolving fast, and that companies seeking to derive serious benefits will need to invest.
There are other obstacles too, not least the regulatory environment, such as privacy laws protecting data.
The biggest issue though is that data needs to be correctly analysed and to be used in ways that help shape business practice in ways that are strategically valuable.
“Econometric techniques can only go so far in identifying causal relationships between variables, such as online data analysis and use and business performance, given that both are likely to be influenced by common factors,” warns the report.
Yet it seems clear that fresh means to access data and smart analysis can become a highly valuable support for creative ideas and companies.