Tag Archives: Big data

The coming merger of database marketing and digital marketing

If you ask me, the ”mobile supercookie” deserves the prize for this week’s most innovative new marketing tech term.

That being said, I was more excited to read what the Verizon-AOL merger means in terms of ad targeting, according to the same article.

It seems like yet another example of a rising trend, namely traditional database marketing and digital marketing coming together. That’s a biggie.

So firstly, in the Verizon-AOL merger you have an ad network (AOL Advertising Network), tracking your browsing behavior with something called a third-party cookie. These cookies are handy as they allow good targeting of ads. When executed well, this is good for both the advertiser and the consumer as ads become more relevant.

However, third-party cookies are also relatively easy for the consumer to block. You just adjust your browser settings. Then you’ll get only those cookies that allow you to use internet banking, ecommerce sites etc.

The bigger weakness with third-party cookies is that they track an anonymous consumer. They know what you do on the web but they don’t know who you are. This has been pretty much the norm in web analytics and marketing.

Enter the Verizon ”mobile supercookie”.

Beginning next month, instead of just the ad network, there’s also your mobile carrier tracking your web browsing. This is powerful because now it’s about an identified customer.

In addition, the browsing data will be combined with data from Verizon’s customer database, for example address, age, gender, interests, location and app usage. This opens a whole new world of opportunities for targeted marketing messages.

But, Verizon-AOL is just one example of a trend.

The world of digital marketing and that of database marketing have traditionally lived pretty much apart from each other. They have mostly been practiced by different people with different mindsets.

Now we’re increasingly seeing customer data in a company’s customer database being merged with digital marketing data which so far has been mostly non-customer-specific.

This will be the norm rather than the exception in a not-so-distant future.

What business are heart rate monitor manufacturers in?

Answer: they are in the health data business.

A startup firm called PulseOn was featured in an article by the leading Finnish business magazine Talouselämä (in Finnish) about a week ago. The company has developed a heart rate monitor without chest belt. I love the invention because I hate to wear a chest belt while working out. 

The article also mentions a number of other Finnish startups that focus on measuring your body, and quite correctly states there’s some unique know-how in mobile and health related technologies in Finland. This is great but not good enough.

The story becomes more interesting when you consider that there’s also excellent competence in data analytics in Finland, and equally noteworthy competence in the healthcare and insurance businesses. 

These are some of the competences that PulseOn and their competitors, such as Polar and Suunto, will need to acquire through partnerships or by hiring new employees.

The reason is simple: the activity trackers and other devices measuring our body are only a small part of the healthcare and health insurance business ecosystem. The US alone is expected to spend 3 trillion dollars in healthcare this year, and the money spent is rising every year. 

Monetizing Data

The everyday health data collected from our bodies will have such a big impact on the society’s healthcare costs that the players controlling the flow and the use of that data will also come to control the activity tracker and heart rate monitor business.

The size of the business opportunity is enticing the big insurance companies into the game, as well as the heavyweights of consumer electronics and the leading companies specialized in analyzing and monetizing data. 

In the face of competition like this, companies like Jawbone, Fitbit, Garmin and their above mentioned Finnish competitors will suffer unless they manage to get well connected into the wider ecosystem and monetize the health data they gather.  

The CEO of the insurance company Aetna put it nicely by saying they are “no longer in the insurance business, but in the information business instead”.

No Competitive Advantage from Technology Alone

A heart rate monitor is hardly such a complex device that any manufacturer would be able to create a sustainable competitive advantage through its technology alone. 

For instance, the July issue of Scientific American shows off filmlike patches of “electronic skin” containing electronic components capable of measuring the body’s motion when integrated with an accelerometer.

I’d expect this is only one of the technological innovations we’ll see becoming commoditized in the health business as time passes.

Enter Incentives by Insurance Companies

The ever-increasing capabilities of gathering quantified-self data will have a tremendous impact on preventing and treating deseases. I’d assume that pretty soon this kind of everyday health data will be gathered from most of us. We already have insurance companies giving people incentives in exchange for their body measurement data. 

An American friend of mine already gets money off his automobile insurance because he’s agreed to have the insurance company install a device into his car monitoring the way he drives.

From the point of view of the insurance company’s business, a device measuring the human body is no different from the device in the car.