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Bootstrapping a Big Data Company Using Services: DataSong CEO John Wallace (Part 6)

Posted on Thursday, May 1st 2014

Sramana Mitra: If you could be more granular, how do you account for that? What data can you work off of and how do you tie that to how you charge?

John Wallace: I thought you were going in the direction of how I know what they spend. So you mean how do we measure TV?

Sramana Mitra: Yes.

John Wallace: We measure all channels simultaneously. The technique that we use comes from the field of medical research. In a study, you can’t infect people on purpose to see the spread of the disease and you can’t withhold life-saving drugs if there’s no discovery. But you still have people trying to understand how this disease affects the population. That’s the closest analogy I can give you. In our case, the treatment though is not a drug. It’s emails and banner ads. And instead of dying, what we’re calculating the impact on is buying. That’s how we categorize it.

As for the TV data itself, it’s a little unfortunate how that data is collected. It hasn’t changed much in the past 50 years. It’s primarily off proprietary panels run by AC Nielsen. It’s still useable data though. What we’ll see in that kind of data is what we call gross rating points by week. We’ll see variability across geographies and time. We bring that data in and we model that at the same time as we’re modeling all of the consumer-level data. It’s held accountable, if you will. At the same time, I’m also clicking on emails and I’m watching TV and I’m seeing a portion of all those rating points as that fluctuates up and down. Does it have an impact that’s measurable?

Sramana Mitra: Very interesting. Do you want to discuss a use case of any of your clients that you feel particularly strong about?

John Wallace: I’ll probably talk about them collectively. It’s a pretty known problem if your measurement is actually done by the vendors that are giving you data. It’s already potentially suspect. We know intuitively that it’s very likely that a particular consumer was probably interacting with more than one channel. It could be email program and search engine.

Sramana Mitra: Absolutely, duplication of channel.

John Wallace: There’s already awareness that the marketing department’s definition of revenue is often quite different from the finance department’s definition of revenue. That is, across all of the customers, we see duplication. The revenue now tied to finance is something big to check off. The other is having the comfort that what we’re looking at is an incremental effect of marketing. That’s the part that’s missing. If you look at things independently, you won’t really be able to see what was incremental.

Sramana Mitra: You are able to tackle duplication?

John Wallace: Yes. So what happens is you have another level of confidence that comes into the client organization. A level of confidence and excitement that there’s clarity now of what’s working and what’s not working. This is what organizations have in common – they’re all trying to squeeze a penny out of a marketing dollar. They are willing to experiment. They’re going to work with social media and see what happens there. They’re going to try anything new but they’re always trying to hold it accountable. When we’ve given that next level of confidence, I’ve watched a series of experiments kicked off from that. Then we watched the dollars move from the lower-yielding areas and continue to go to the highest.

This segment is part 6 in the series : Bootstrapping a Big Data Company Using Services: DataSong CEO John Wallace
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