The world is entering a new era of “Big Data” according to a new McKinsey report which claims that businesses that can get their heads around how to harness the constant flow of information are winning the race of profit and competition.
The news is likely to offend many die hard traditionalists in newsrooms, who are still enraged by the Internet making the word “content” a synonym for journalism. But as obnoxious as it was for purists to contemplate the idea that the poetry of beautiful writing and stunning photography could be belittled by a collective noun, “content” has stretched our perceptions of journalism now. The word has helped us to visualise story telling environments that incorporate rich picture galleries, video, and interactive graphics and information that is both spontaneous and curated. Calling journalism “content” broke an old perception and allowed us to see our product in a different light — the light of our readers and customers (who are now called users, by the way, but we’ll leave that for now).
And so, to data. Data is an interesting one. A big one. Bigger than “content” because data could describe not just what we produce, but, if we get smart very quickly, considering that what we do is data could be our new business model.
It’s even a model that many media companies have proven themselves to be extremely adept at — Dow Jones, Financial Times, Reuters. And when you look at the phenomenon of Google and Facebook, it’s actually the fuel in their tanks that makes us so jealous. The two online monoliths showed us that data is not just for financial boffins and the big end of town — data packaged in a warm and friendly way can change everyone’s lives.
So, “Are you ready for the era of big data?” ask Brad Brown, Michael Chui and James Manyika in the latest McKinsey Quarterly.
“Emerging academic research suggests that companies that use data and business analytics to guide decision making are more productive and experience higher returns on equity than competitors that don’t,” the report says.
It claims that “networked organisations can gain an edge by opening information conduits internally and by engaging customers and suppliers strategically through Web-based exchanges of information. Over time, we believe big data may well become a new type of corporate asset that will cut across business units and function much as a powerful brand does, representing a basis for competition.”
And this is where the idea becomes extremely attractive: data as a brand. Surely companies whose core business is creating stories, photos, images, and video on a 24/7 news cycle — most of it original or a unique understanding of recent events — would know a thing or two about content.
But newspaper companies have always had a lackadaisical attitude to data. While companies such as Google and Facebook — and even Flipboard and Welt — make it their business to hoover up information — much of it ours — and regurgitate it in new formats and contexts, newspaper companies have been happy to throw it out each day — turn it into fish and chip wrapper. For us, the excitement has come not from understanding how what we have done could work in new ways so that we could extract additional value, but on the lure of the next story and doing it better all over again tomorrow.
We even pay extraordinary amounts to third party organisations to provide industry insights and reports into markets which our reporters cover every single day. That’s a huge irony when you think a lot of the information the consultancies are using has come from our own news pages. When it comes to making business decisions, newspapers are insecure about trusting our own insights, nor do we have the best technology for capturing and analysing what we’ve done.
How silly are we?
Some newspaper companies — the New York Times, Guardian and Financial Times — have understood that for paywalls to work, they need to have good data collection functioning behind it, harvesting reader details and preferences and allowing the ability to share through social media. But it’s still just the tip of the iceberg.
“Companies need to start thinking in earnest about whether they are organised to exploit big data’s potential and to manage the threats it can pose,” the report says. “Success will demand not only new skills but also new perspectives on how the era of big data could evolve — the widening circle of management practices it may affect and the foundation it represents for new, potentially disruptive business models.”
McKinsey offers up five areas to consider:
- Data is no longer proprietary. Rather, it is undergoing “radical transparency.” Consider the implications for your business.
- Big data allows you test all your decisions and conduct experiments. Consider how that could change the way you compete.
- Big data allows widespread, real-time customisation. Could this be a game changer in your business? The answer for newspapers is clearly ‘yes’ on this. We’re seeing the impact of it already.
- Big data can augment or even replace management, or some managerial decisions. (Bring it!)
- New business models are being built on data.
For data to work for newspapers, we will need to open up our organisations, not just to the silos within them but externally. And we will need to start refining how we think of our stories and content not just in terms of words and pictures, but in terms of search. And even then not just from a library clips perspective — which most newspapers execute reasonably — but in our ability to then turn that search into volume and digits that can be crunched and analysed and put into new context by analysts and statisticians who see this kind of information differently from us wordsmiths.
But the truly intriguing — and exciting — thing about big data is that it encourages newspaper companies to stop looking externally. The solution to our new business model could be as close as the very thing we produce every single day. They key will be inviting into our organisations the data gurus, analysts and statisticians who don’t necessarily care about the crafting of the words, but who can provide new business perspectives on what we already do very well.