Analytics are the driving factor behind all of big tech. It’s on the tip of every innovators tongue and in some ways become a term that means nothing. If you find yourself speaking to someone who says “analytics” in every other sentence, it’s a good sign to leave that conversation immediately. On the other hand, if you’re that person saying analytics to anyone and everyone, keep reading this article. Analytics is just a term for interpreting data. To really harness the words power, you need to understand where the data is coming from and how companies are using it.
Welcome to your micro masterclass on analytics.
Working with a local Milwaukee SEO Company for fifteen years gave me a keen insight into exactly how tech organizations are collecting data. To get a base understanding, all you have to do is look at your phone. We’re accustomed to giving tech companies every bit of data (Name, gender, sexual preferences, etc…) they need to make our lives more convenient. Before we focus on how companies use that information once they have it, let’s dive a bit deeper into how they source it.
There are three primary ways that companies collect data. 1) They ask for it, 2) they track your movements indirectly, 3) they buy the information from another company. The first way is the most straightforward, it’s exactly the process described above. Any online form that you fill out immediately collects the data inputted and starts to learn exactly who you are.
That’s when indirect data comes into play. These ways of customer identification are a little more obfuscated and that’s on purpose. Customers don’t always love being asked a million questions. It’s much better (For large tech companies at least) to collect the data without the user ever even knowing. Web beacons and cookies are used to take in indirect data. Allowing companies to learn your browsing history. Where you’ve been and where you go after leaving their website. Giving them an increasingly deep understanding of your habits and interests that will make the company lots and lots of money.
In addition to directly talking to customers or learning their data through watching their habits, larger companies will simply buy user data from other businesses. Oracle and Acxiom have turned into billion-dollar companies through buying and selling user data. They utilize smaller e-commerce and data pillaging sites to collect the information. Right before turning around and selling it to anyone who is interested.
So, how do you use the information once you’ve collected it?
If you’re a large company, you sell, sell, sell. Advertisers are spending billions of dollars every day to get their product in front of the right people. The landscape for digital advertising has shifted at outrageous rates for the last twenty years and it’s not going to change anytime soon. From banner ads to podcast spokesmen, there are a million ways to access a company’s target audience. The information helps make sure that the audience is the exact right one for the criterion of the company. Though it’s not quite that simple. This kind of data mining is why that pair of pants you looked at seems to follow you all over the internet now. A cookie noticed your interest and bought ad space all over the internet to promote to you.
Companies also use the data to change their platforms. It’s all about keeping users on their sites for the longest amount of time possible so that they buy as much merch or watch as many ads as possible. Turning you and other consumers into the product. Getting people to over indulge so that the company can turn a profit for its investors. So, businesses track when you leave a website or app. This tells them that there’s a problem that needs to be solved. One of the most famous examples of this is a multi-million-dollar Google endeavor in which they used focus groups to identify the exact best color of blue for their logo. It took nearly a year of finagling until they decided on their specific shade of pantone. Tech companies will do any last thing to optimize return.
At this point you might be wondering if digital analytics is amazing or terrifying. That’s the thing, it’s a bit of both. The amount of information available is breathtaking, the level of privacy being given away on a regular basis is staggering. So, while you discuss analytics and all the ways your app or platform can capitalize off of user data, let this serve as a bit of caution. There is always a price to be paid in business. Currently people are not being paid their fair share for the information being seized, there’s no telling how long that structure can last.