Information has always been a key part of doing business – having an intimate knowledge of customers and suppliers is one of the traits of a successful entrepreneur.
As Internet access becomes taken for granted and computer processing power becomes cheaper, the nature of how business data is used is changing.
Earlier this week the iStrategy digital marketing conference was held in Sydney. Much of the talk at the event was about how marketers can use the data being generated by the Web.
At the opening panel representatives from PwC, Google, Expedia and News Limited showed how Internet businesses are gathering data.
Nicholas Chu of Expedia went through the journey of a family to Disney Land, describing how they are integrating search and social tools into the experience of organising a holiday online and catching up with friends.
Lucinda Barlow of Google told the story of how a doting father’s baby photos were saved after he lost his phone, luckily it was all synched in the cloud with Google+ and Picasa services.
All this data is being collated, saved, mined and processed. Companies like Google and Expedia – not to mention Facebook or Apple – see this information as their businesses’ major asset.
One of the other panel members, Stuart Spiteri of News Limited, raised the problem with this when he asked if everybody in the room really understood the consequences of giving their data to intermediaries like Apple or Facebook.
For businesses this is a problem, we’ve become used to the free platforms given to us by Facebook and Google while the easy distribution systems like iTunes mean it’s easier to give Apple a 30% cut than sell products ourselves.
In the travel industry it means Expedia or any of the other dozens of travel planning sites like Tripadvisor or, again, Google know more about our customers and the patterns affecting our business than the local hotel, restaurant or tourist attraction does.
That easy booking service suddenly looks expensive when it becomes clear it could be offering different holiday or meal options to your customer whose likes and preferences it now intimately knows.
When the web first came along many of us, myself included, believed it would get rid of the middle man. We were wrong.
The web has affected the businesses of existing middlemen like department stores, newspapers or travel agents but in their place a whole new group including companies like Amazon, Google and Expedia have taken their place.
Whether these middlemen add more value than ones they replaced will be seen, but we can be certain the new breed are much better at collecting and analysing data about our customers.
One of the big battles for the next decade is going to be for customer data. Smaller businesses may find themselves marginalised as the big Internet companies fight to grab information about consumers.
It’s worthwhile treasuring what you know about your clients and considering exactly which of the online gatekeepers you’re sharing these vital assets with.