Few ideas hold more sway among entrepreneurs and investors these days than "Big Data." The idea is that we are now collecting so much information about people from their online behavior and, especially, through their mobile phones that we can make increasingly specific predictions about how they will behave and what they will buy.
But are those assumptions really true? One doubter is Peter Fader, codirector of the Wharton Customer Analytics Initiative at the University of Pennsylvania, where he is also a professor of marketing. Fader shared some of his concerns in an interview with reporter Lee Gomes.
TR: How would you describe the prevailing idea about Big Data inside the tech community?
Fader: "More is better." If you can give me more data about a customer-if you can capture more aspects of their behavior, their connections with others, their interests, and so on-then I can pin down exactly what this person is all about. I can anticipate what they will buy, and when, and for how much, and through what channel.
So what exactly is wrong with that?
It reminds me a lot of what was going on 15 years ago with CRM (customer relationship management). Back then, the idea was "Wow, we can start collecting all these different transactions and data, and then, boy, think of all the predictions we will be able to make." But ask anyone today what comes to mind when you say "CRM," and you'll hear "frustration," "disaster," "expensive," and "out of control." It turned out to be a great big IT wild-goose chase. And I'm afraid we're heading down the same road with Big Data.
See also several recent stories about Wharton Customer Analytics Initiative