Data after the gold rush

There are 24 carat marketing lessons to be learned from the Californian Gold Rush of 1849. Geoff Copps extracts the nuggets.

For those of us still grappling with how technology is transforming the communications industry, there is much to take from events that unfolded in 1849, in a place that has once more become the epicentre of change.

In January 1848, a foreman named James Marshall was working east of Sacramento when he saw something glinting on the river bed. After inspecting the site, Marshall and his boss made the journey to nearby San Francisco, then a tiny port. News soon spread of the men’s discovery. A year later began the first wave of migration to the area – the start of what later became known as the ‘Californian Gold Rush’.

These days, data has been called the ‘New Gold’. The point is made casually, in reference to the commodity’s era-defining potential value; it is never elaborated upon. But what if we were to take this statement more literally?

I believe that the comparison is more far-reaching than it at first seems. And it can help us to understand our own historical moment and the implications of the new ‘Gold Rush’ on marketing practice.

Where to start? Firstly, there is the shared lexicon – language imported from one context to the other that makes the world of the gold-seeking ‘forty-niners’ sound strangely familiar. Mining, sifting, filtering. Extracting, transforming, loading.

Then there are the other similarities. The Gold Rush was a phenomenon that grew out of a specific part of California, close to the port town of San Francisco. It had an international flavour, with migrants coming from some 25 different countries. These pioneers liked to dress up their ambitions with utopian ideals and visionary quest metaphors, but when it came down to it they were as ruthless and profit-driven as anyone else.

They operated in new territory – literally new, since California in 1849 was yet to be granted statehood (the Mexican-American War had not long ago ended). Their environment was essentially lawless, without clear property rights, standards or regulation. The ‘forty-niners’ played fast and loose and the US economy benefited: between 1848 and 1860 the equivalent (in today’s money) of tens of billions of dollars of gold were extracted from the Californian goldfields. From this milieu emerged the richest citizens of the age…

Enough? The cheeky contemporary parallels are too good to resist.

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But let’s consider a more specific aspect of the Gold Rush that is comparable to today’s marketing practice. Namely, the different ways of extracting value from an environment suddenly discovered to be rich in a new, imperfectly understood asset.

Among the original ‘forty-niners’ there were two types of prospector.

First came the Hunters, who sought their rewards in aggregate form – as ‘nuggets’. They roved around, speaking to people. They used traditional, tried-and-tested methods. They often operated on a hunch, or on sites where heavy-duty equipment had already been used to open up the land. Successful gold hunters approached their task with a keen eye and a broad knowledge base.

Then there were the Sifters. They worked systematically at extracting their product, panning riverbeds, capturing, cleansing. It is fine, granular work. It requires specialist equipment, expertise and vision. There is little or no luck involved.

Which approach is better? The answer, of course, is both. But in the 1800s, it was the Sifters who eventually gained the upper hand. This was because their skillset made them better suited to business conditions.

Crucially, they were able to work with their asset in the form in which it most commonly appears in the landscape. And they had the knowledge and vision to put this asset to use in this most granular of forms.

Now fast-forward 170 years (give or take). Let’s look at today’s key marketing challenge.

Advancements in media and technology over the last decade mean that the environment around us has suddenly become rich in data. It is incumbent on us to mine and unlock the value of this burgeoning resource.

Marketers have long spoken of a surfeit of data. The difference today is that the majority of this asset comes in granular form. And it comes thick and fast: structured and unstructured ‘row level’ data from brand and media owner CRM files; from third-party marketing databases; from ad servers and DSP/SSPs; from site analytics software; from syndicated market research surveys; from mobile beacon technology; from passive metering software; from miscellaneous APIs; and so on.

Of course, the aggregate view – or ‘nugget’ – will always be a prized item for delivering media insight. But sometimes broad-brushstroke outputs just don’t cut it. On occasions, they seem plain retrograde.

There isn’t space here to elaborate fully on this point, but in support of my argument I offer two brief examples.

Over the last few years, I’ve collaborated with the ITV Audiences team on a long-term project to disentangle and quantify the impact of the broadcaster’s owned activity on TV viewership. We have looked at everything from social posts to promotional airtime, app push notifications to email newsletters.

Our work together can and does produce broad-brushstroke findings – the overall average impact of Twitter on ITV’s portfolio, for instance. But the real power of the data, and its actionability, lies in the ability to look at impact across specific channels, programmes and episodes – right down to the minutest level. This depth of information is what ITV’s ‘Real Time Studio’ team crave.

Another relatively recent development has been Attribution Models supplanting traditional Marketing Mix Modelling as a means of understanding how digital-led campaigns work. The advantage of these models is that they are fuelled by cookie- (or device ID-) level data.

Again, by working with disaggregated datasets, these studies deliver the granular actionable insight needed to power agile, successful campaigns – such as which individual placement or creative is working hardest to deliver against a chosen KPI.

So to conclude, there are broad lessons we can draw from 1849.

Like the prospectors of nineteenth-century California, in order to take advantage of the ‘New Gold’ we need a mixture of skillsets. Data might be a plentiful resource across the media landscape, but expertise and imagination are required to root it out and put it to good use.

Marketing industry culture has traditionally privileged Hunters, but we need to recalibrate our thinking in order to allow Sifters to shine.

We rely on Sifters to develop and operate the new wave of exciting technologies. These range from people-based marketing databases to addressable ad tech solutions; from in-flight campaign optimisation engines to analytics packages that utilise machine learning and AI.

Sifters enable advertisers to realise their granular data usage ambitions. We urgently require these skills both to meet the demands of the present and to prepare for the future.

The gold analogy also shines new light on the popular understanding of data. On examination, we recognise the term ‘Big Data’ as a misnomer. In reality, Big Data is not ‘big’ at all.

Big Data is tiny and comprised of many, many parts: tables, fields, variables, records, values. Granular in the handling, granular in the deployment, but a huge part of the industry’s future.

Geoff Copps is managing partner, head of data at IPG Mediabrands UK