Data Mining – what do the numbers mean?

Ever wonder how Google, Facebook, YouTube selects ads to your interests and hobbies? For example, I like road cycling and when using the Google Search engine, Google will display ads on the right-hand side bar that will link me to online cycling stores such as Chain Reaction Cycles or Merlin Cycles. This is an example of Google Data Mining users web browser cookies and previously search items. Google names this service Google AdSense, and it is one of the main drivers of the company’s revenues. While this is an interesting topic, the main focus of this blog post will be on Data Mining conducted by Target, which effectively predicted when woman are pregnant, and also estimated the month of when the baby is due just based on the purchasing habits of their customer

So how did Target achieve such a feat? Let’s start from the beginning. Every time a new customer makes a purchase with a credit card, a purchasing profile is created for the customer and every future purchase will be added to the profile. As individuals shop more, Target starts to collect data on what each customer is buying. Then, a team of statistician are hired to make sense of the data and predict future buying habits of the company’s customers. Data mining is essential for marketing. It allows companies such as Target to create specific advertisements for products based on the customers buying habits, thus creating a unique and direct marketing communication stream for each individual costumer. Data mining makes marketing more effective for the company, as the company can cater to the unique needs of the target market, rather than trying to capture the market with a broader marketing strategy.

You can have a read of the Target article here: http://www.forbes.com/sites/kashmirhill/2012/02/16/how-target-figured-out-a-teen-girl-was-pregnant-before-her-father-did/

If you want to know more about data mining processes and how companies learns their customer’s secrets through numbers, refer to this New York Times article which provides a comprehensive high level summary: http://www.nytimes.com/2012/02/19/magazine/shopping-habits.html

Email Marketing Adjustments

Earlier in October, Google’s Gmail (email service) had one of its’ bigger updates in recent times. What are the changes? Gmail introduced a “Inbox Tabs and Category Labels”. The default tabs are “Primary”, “Social”, and “Promotions”. An example of a primary email would be ones from friends, family and business. For “Social Emails”, emails that are related to social media are categorized into this lab. Lastly, “Promotions” tabs contain emails that are promotion for companies and stores. For example, Banana Republic’s emails would be considered a “Promotional” email as it is notifying the user of clothing sales.

Realizing the Gmail update, companies such as Banana Republic (BR) now understood that their emails are no longer inboxed under the “Primary” tab, meaning the customer will not see their emails as easily which contains deals and offers. This update essential affected BRs reach to the customer, To combat this, BR sent an email to all Gmail users which included instructions of how to move BR’s emails from the “Promotions” tab to the “Primary” tab.

I am most impressed by the reaction and the quickness to action by BR marketers, as this email (pictured above) was sent only a few days after Gmail implemented their new email layout.

If you want to find out more about Gmail, you can follow this link here: http://www.google.com/intl/en/mail/help/features.html

New organic suspension in cars!

Mercedes-Benz recently released a commercial that’s promoting their new “Magic Body Control” suspension system. In reality, the system is really an active suspension system, meaning that that a computer analyzes the road ahead and accounts for the roughness on the road aheahd resulting in a smoother ride for the customer. Instead of using technical jargon and using a traditional engineering commercial approach (i.e. a comparison between competition’s car suspension), Benz opted for a organic approach. Using the chicken’s ability to keep their head relatively stationary as its body is being moved around is a creative way of demonstrating the prowess of Benz new suspension system.

However, this commercial may raise some concerns from animal activists. For example, where the chickens harmed during the filming of this ad? Probably not, but there’s always that skepticism.