Google is powerful because hundreds of millions of folks use Google to search the web every day.
Facebook is powerful because hundreds of millions of folks log-in to their Facebook account every day to communicate with family and friends.
LinkedIn is powerful because millions of professionals create online profiles and connect with their contacts via the site.
Look a level deeper. At a fundamental level, these companies are powerful because they have information about you...your background, your likes, your conversations, your actions, your location, your interests, your friends, your travel schedule, your profession, your hobbies, your kids... It is mind-blowing how much information these companies have about you.
With this information, they are able to more accurately suggest which ads and offers might be of interest to you and then sell you to relevant advertisers/product vendors, ultimately profiting from the data they have about you.
More importantly, as science and technology evolves and as there is progress in behavioral economics, data mining, psychology and sociology in the connected world, these different fields will come together and companies that have this data will be able to derive intelligence. It is expected that in at least some scenarios they can predict your actions, and perhaps even know more about you, than you do yourself. Charles Duhigg's story of the retailer Target using customer tracking and data analytics to discover a teenage girl's pregnancy and then leverage this to make sales--even before she had a chance to tell her father--is perhaps an anomaly today. Yet is a powerful example of the power of data when leveraged effectively. Given the progress in data collection, technology and sciences such as behavioral economics, this analytical capability could very well become the norm.
If it does -and if product vendors know consumers better than their families do, enabling them to predict customer actions before they act--how much freedom of choice will a consumer really have?
If the companies use all the information they have about their customers to influence buying behavior, are consumers really buying of their own volition? Or do they know their base so well that they are ultimately forcing the purchase?
When is the line crossed from advertising and influence to subtle coercion?
These are all valid and important questions to be answered as both technology and society evolve. However, the one thing that is clear is that, in the business world, it is the company that has the data that has the power. And ultimately, it is the company that has power that wins.
Consider this example.
1. A company spends a lot of $$$ on Facebook fan pages, seeking to get their fan numbers higher than the competition as they try to increase likes for their products. They also run promotions on Facebook, and they spend time, $$$ and effort investing in increased user engagement on their FB fan pages. Company X wants to increase user engagement, e.g. Likes and comments, on their Facebook fan pages so they run promotions and spend more money to bring in more brand awareness and loyalty.
2. Facebook collects all the data, thanks to the investment from company X.
3. And then, Facebook sells this same data (NOT in the same form, mind you) to company X so the company can "advertise and monetize."
Do you see anything wrong with this picture? Isn't company X paying twice, while Facebook gets paid twice? More importantly, even after paying twice, company X has built no strategic marketing leverage because it doesn't own any of the original raw data.
Don't get me wrong. A Facebook presence is important to build a company's brand and increase customer awareness. But, it is important for reach, not for engagement. It is imperative that you and your company understand which side of your bread is buttered and keep what's important (the data) closer to home. To build a successful company, you must own the customer and the prospect. You must own the engagement. You must control or manage the conversation and where it happens. It is critical that you own every aspect of the data as it relates to your prospects, possible buyers and customers, and that you are able to mine this for your own benefit, as you wish.
In other words, your web site must be the center of gravity for your online strategy. While you need to use multiple channels for reach, the most important activity needs to coalesce around one place, and that must be your web site. Your web site has to become both a content hub and a community hub. It has to become the place where you don't just talk about your company and your product lines (content dissemination), but you interact, communicate and engage with each and every visitor (communication or engagement hub).
If you do that, you will collect data that will you give leverage & power in the marketplace.
If you settle for anything else, you are likely frittering away your competitive advantage as both the online world and technology changes around you. To keep the advantage, to stay competitive, you need to own the data.
Follow Navin Nagiah on Twitter: www.twitter.com/@NavinNagiah