Tuesday, August 20, 2019

Data Can Market Itself into Something Really Big

I finished a decent book recently - Digital Marketing in an AI World - about artificial intelligence in marketing, and big data.

Author Fred Vallaeys was one of the earliest google employees and he was involved in a lot of the big data (and systems) google has created over the years to enhance their marketing platform (which still makes up almost all of the company's revenue).

In the book Fred made a couple of interesting points that relates in some way to horse racing.

One of them - software, big teams, big data and wagering - I will cover later when I have some time. The one I'd like to share some thoughts relates to "the data"; a topic not unfamiliar to those in this sport.

Fred noted that back in 2005, google looked into the purchase of Urchin. Urchin was a system that collected data from various sources and allowed a business to see where pretty much every metric they could imagine was coming from. I used the system in my work, and it was a leg up. There was a lot of money being spent on developing these analytic packages at the time, but it truly was nascent.

Google being in the space scared a whole lot of folks:

"Many people were afraid that this was going to kill the analytics industry. Chills went up the spines of businesses and vendors who were installing tracking systems," Fred wrote.

When google announced this package - one they could charge a high price for; this is called Google Analytics today - was going to be free, it was even more concerning. It could be the end of many businesses, in a new space.

The result was the exact opposite:

"Because google made analytics plentiful and cheap, all of a sudden everyone was paying attention, and able to afford analytics. This turned out to be a huge boon for the industry. Businesses began to say "this is something we should do more with."

This freeing up of the data caused massive ripple effects, and it sure didn't kill an industry.

Back at a conference in about 2004 I hung around with these folks from Utah, all smiling and wearing green shirts. They had an awesome tracking and analytics company, but they were quite small. As demand for analytics grew, though, so did they. Four years later the small team were rich - Adobe acquired them for $1.8 billion.

Google freeing up data and making it all very mainstream no doubt helped them - and others; there were dozens of these companies, and many are still in business today - succeed. It created a massive ecosystem where each and every new entity - third party ads, internal ad spend (like Amazon) - and just about everyone else can enhance their sales process and grow their business.

Unlike web analytics which is still growing today, horse racing at the very best is stalled. Perhaps using institutional roadblocks and heavy regulation to keep others out is ROI positive in the long-term for the sport when it comes to data. However, when we look at where the growth is coming from in other industries, it makes one wonder. If Equibase invited participation and intra-sport growth through transactional-type economics, would the sport be better off? Perhaps it would.

Have a nice Tuesday everyone.

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