Is Facebook taking measurement and data analytics too far?

Measurement and analysis gives companies the ability to understand their customers and markets better, improve internal efficiencies, and much more. Having access to more data usually means better insights. However, are companies like Facebook overstepping the mark by exploiting our private information? 

Just think about it: people have willingly uploaded onto Facebook who their friends are, what their hobbies are, how old they are, where they live and whether they are in a relationship or not. What's more, Facebook knows what people like and dislike, what their interests are, what their favourite movies and songs are - simply from the updates we share and the 'like' buttons we press. The big question is: are you happy for Facebook to exploit what they know about you?

The entire Facebook business model is based on the effective use of your data. Here is the deal: they give you a free social media platform to use and in turn sell advertising and insights based on what they learn about you. Today, Facebook has massive capabilities to collect, store and analyse data - what we call 'big data analytics'. This allows Facebook to sell very targeted advertising - e.g. 'someone living in the Mid-town district of Manhattan, who is single and who is interested in baseball and likes pizza'. This kind of knowledge is a marketer's dream!

But Facebook goes beyond simply analysing and 'mining' the user profile data you have shared and the updates you have written. USA Today revealed how Facebook tracks you across the Web. Basically, when you create an account, Facebook inserts a 'tracking cookie' into your Web browser that allows Facebook to track each website you are visiting. This means when you are logged into Facebook and then browse the web (completely separately from your Facebook activities) Facebook knows what sites you are visiting.

There's more: Cnet reports that whenever you click a Facebook 'like' button on any website, your preference is not only shared with your friends and on your profile, but data about your interests is sent back to Facebook's servers - ready to be provided or sold to their advertising partners. What's more, personal data is exchanged when you use apps like FarmVille or Words with Friends via Facebook. It has even been reported that signing up for these apps will give those companies who created the apps access to your personal data - even details you specifically told Facebook to keep private.

One more: Facebook has also invested in image processing and 'face recognition' capabilities, that basically allow Facebook to track you - because it knows what you and your friends look like from the photos you have shared. It can now search the Internet and all other Facebook profiles to find pictures of you and your friends. Face recognition allows Facebook to make 'tag suggestions' for people on photos you have uploaded but it is mind boggling what else they could do with technology like that. Just imagine how Facebook could use computer algorithms to track your body shape. They could analyse your latest beach shots you have shared and compare them with older ones to detect that you have put on some weight. It could then sell this information to a weight loss club in your area who can place an ad on your Facebook page. Scary?

I believe that the privacy debate is one of the most important debates in the modern field of measurement and data analytics. Here are my questions: Are you comfortable with Facebook using your data? Maybe you see it as analytical progress where Facebook can find your long-lost friends and you like the fact that Facebook can recommend relevant products and services. Or does this all feel a little too much like 'Big Brother is watching you'? Do you see it as an intrusion of your privacy and does it scare you that Facebook knows everything about you and could exploit and sell what it knows? Does this make Facebook too powerful? What do you think? Share your views...

And as always, please feel free to connect and discuss with me:

Via the Advanced Performance Institute: http://www.ap-institute.com

Via Twitter: @bernardmarr

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Via YouTube: http://www.youtube.com/user/bernardmarr?feature=watch

Big Data and Robots - together they might challenge you for your job

Put together robots with big data analytics and you have a powerful mix that could challenge us for most of our jobs. Big data analytics allows us to leverage large amounts of structured and unstructured as well as fast-moving data such as real time conversations on text, email and social media, video images, photos, data from location sensors in our phones, etc. Put this ability into a robot and they will not just threaten to replace lower-skilled jobs such as assembly line workers or supermarket personnel but now they have their eyes on doctors, pilots and journalists too!

What we are now witnessing is a revolution that will transform our lives forever. The last time we saw something similar was during the industrial revolution when machines delivered massive productivity gains. However, that time it gave people who primarily worked on farms new job opportunities in factories. What seems to be different now is that machines will take our jobs without giving us the same level of new opportunities and jobs (unless I can’t see it). 

I was in Silicon Valley last week advising executives of leading tech companies on big data analytics and enterprise performance. When I was in my car from the airport to the hotel I saw Google’s ‘Self-driving car’ on the freeway. I was exited to see this ‘big-data enabled machine’ on the road and asked the driver to slow down so I could take a photo on my phone. When we then drove on I chatted to the driver about the car and his response was ‘Looks like Google will take my job soon!’ This conversation actually prompted me to write this piece.  

We now have ‘intelligent’ robots and machines that leverage our ever-increasing ability to analyze enormous and unstructured datasets (what we call big data analytics) to perform human jobs. Here are just a few very real examples (and there are endless others):

• Pilots: We know that autopilots have been assisting pilots to fly planes for many years. However, the latest commercial airlines are now able to fly the plane unaided. They can take off and land you safely (and arguably more safely than humans as most air disasters are down to human error). We just have to look at the military where now unmanned aircrafts (so called drone) are taking over. Fighter jet pilots will be Air Force history soon. Drones are armed with high resolution cameras that generate images which can be analyzed on board or transmitted via satellite to a powerful big-date engine that also monitors call logs of potential targets, movements using sensors,  social media activity, etc. The big-data enabled war is on!

• Doctors: Robots are already assisting surgeons to perform operations and doctors use large-scale databases of medical information to inform their decisions. However, soon robots will be able to make a diagnosis and perform operations without human input. Robots could scan your body and then based on the entire medical knowledge library (as well as data on your own medical history, DNA code, etc.) make a solid diagnosis and even remove a brain tumor with better results than even the best brain surgeon could.

• Call center worker: We all know about the irritating automated answering systems in call centers that give you options and then route your call to the supposedly ‘right person’ that has the skills and knowledge to help us with our query. What we are now seeing is the rise of natural language systems that are able to have a conversation with humans. IBM has developed Watson – a computer that recently challenged two of the all-time best Jeopardy! players. Without access to the Internet, Watson won the game by interpreting natural language questions and answering back after analyzing its massive data memory (that included a copy of the entire Wikipedia database).  This means that when you ring any call center you will always speak to the ‘right person’ – only that the person is a robot instead!

• Journalist: A company called Narrative Science recently launched a software product that can write newspaper stories about sports games directly from the games’ statistics. The same software can now be used to automatically write an overview of a company’s business performance using information available on the web. It uses algorithms to turn the information into attractive articles. You can see how newspapers of the future will use these tools to generate stories and deliver them to you with customized content and in a bespoke format based on your preferences it gets from the browser logs of what other content you are reading and what social media posts you are sharing.

This development is somewhat scary as well as tremendously exciting. What is scary is the thought that a big-data enabled robot could take my job in the not-too-distant future. I am interested to hear your thoughts on this - please share this post in your network and leave a comment to generate a discussion on this important topic.

Also, feel free to follow me on Twitter @bernardmarr.

New Year’s Resolutions and Performance Management

Performance management and New Year's resolutions have a lot in common. We use performance management to help us achieve our goals (something many companies struggle with, similarly to many of us struggling to stick to our New Year's resolutions).

Is your resolution for 2013 to lose weight? Save more money? Quit smoking, drink less alcohol or eat less chocolate? Or is about getting a better work-life-balance, reading more books or learning something new? History tells us that every year on the 31st of December when the clock strikes midnight we torture ourselves by making a New Year’s resolution, which we will then break. Comes February, most of us will have forgotten about our resolutions until the time for the next New Year’s resolution comes along.

After reading a bit about the most common and most popular New Year’s resolutions here are my top-ten we won't keep:

1. Go on a diet
2. Do more exercise
3. Eat more healthily
4. Get finances in order / save more money
5. Stop smoking or drinking
6. Learn something new
7. Get a better work-life-balance
8. Travel more
9. Change job or career
10. Be less stressed

Every year we find a similar list. Is your resolution among them? The question is: Why can’t we keep our New Year’s resolutions and why do we make the same resolutions year-after-year? The reason is that we don't follow the right steps. If you want your New Year’s resolution to stick this year, simply follow these six steps (the similar list I give companies when I help them to reach their performance goals):

1. Be serious about achieving them. We often make these New Year’s resolutions when we already know we won’t keep them. We have to be honest with ourselves and make resolutions we really mean.
2. Set yourselves milestones. Instead of saying this year I’d like to get to a size 10 or lose 2 stones, it is better to say I would like to lose a pound a week. Your milestones should be stretching, but realistic and achievable.
3. Create an action plan. We need to come up with an action plan of how to achieve our milestones. Having targets and milestones without an action plan is a trip to fairyland. Create an action plan you can follow, e.g. exercise for 60 minutes every Monday, Wednesday and Friday or stick to 500-calorie lunches every day.
4. Get support from others. It is a lot easier to stick to your plan if your friends and family members know about your plan and support you in your endeavor. For example, you could aim to lose weight together with friends or members of your family. You are far less likely to stop if you are trying to achieve your goals as a team.
5. Monitor your progress. Put in place regular reviews of where you are in relation to your goals. Especially if you have set yourself some milestones it is important to check how you are doing. You could even create a little chart that you put on your fridge to track your daily or weekly weight.
6. Celebrate and reward success. Give yourself something to look forward to and create a reward for achieving your milestones. For example, build in some treats for achieving your milestones and maybe a bigger reward for achieving your overall goal. Rewards could be doing something you wanted to do for a long time or something you love doing. Just make sure not to overdo on the rewards in a way that blows your goals – i.e. rewarding your weight loss with a massive cream cake!

Good luck! As always, I am keen to hear from you. Have you made a New Year’s resolution this year? Have you broken one? What do you do to make them stick? Can you see this list useful for your performance management success and New Years resolution?

And finally, feel free to connect

Via the Advanced Performance Institute: http://www.ap-institute.com

Via LinkedIn: www.linkedin.com/in/bernardmarr

Via Twitter: #bernardmarr

Measuring your Facebook ROI!

Over 1 billion of us are on Facebook, half a billion on Twitter, and over 185 million on LinkedIn - and these numbers are growing fast. Even if you are using social media just for fun, businesses are increasingly using it to look for future talent and many individuals and businesses are using social media with the aim of generating more business. For many it is a leap of faith because they are lacking some basic tools to measure the return they are getting on their investment in time and money.

If you want to use it for business then it is important to have a strategy and in my experience most individuals or businesses have no clear social media strategy and therefore no clear metrics of success. In the absence of this, they track the over-simplified metrics such as the number of likes on Facebook, the number of connections of LinkedIn and the number of followers on Twitter. They are good starting points but will actually tell you very little. They are what I call 'input metrics' and include measures such as:

• Your Network Size or Total Connections, followers, friends or likes’ 
• Your Network Growth Rate – counting the amount of new invitations, new followers, or new friend requests is a good way of tracking that your network is continuing to grow. If you get a good level of new invitation every week then you know that you are growing your influence and potential value from your social media activities. 

Even though the above ‘input’ measures will give you some initial insights, their values are limited. Slightly more sophisticated are ‘engagement’ metrics that look at interactions and level of engagement. I suggest you track

• Level of Interactions (e.g. likes, re-tweets, and comments) on updates – a great way to build a presence on any social media network is to write regular up-dates and a test of whether these up-dates are relevant and useful to your community and network is to look at the number of people that read them, the number of likes or re-tweets you get and the number of comments your posts generate. If you post updates and no-body reads them and no-body interacts then this is a clear indication that your network is not working for you or that your followers might 'not be real' or relevant. 

Measures of engagement are more insightful than the simple input measures but even engagement measures should not be confused with ‘outcome’ measures. Outcome measures track the ultimate success of your social media activities and provide you with the definitive insights of your LinkedIn success. While it is great to grow your network and even better to engage with your contacts, the final goal for most business users is to either generate new and better job offers or to generate new business. Unless this is happening, your social media (for business) activities are still questionable. So here are some outcome indicators:

1. Conversion rate - most business want to ultimately sale something and therefore a sales conversion measure would be good, i.e. how many sales were generated by people coming to you through social media platforms. However, sometimes conversion can also mean people signing up for a free service or making an inquiry. What you count as a conversion is very much dependent on your aims and business strategy. However, there are two more outcomes that might be useful to track:
2. Search engine ranking and traffic from social media platforms – even if customers don’t buy anything straight away, having a social media presence that drives traffic to your online offerings will help with your search engine rankings. Search engine providers like Google and Yahoo will increasingly take into account social media presence when delivering search results. A simple metric is increased website traffic (e.g. page views and bounce rate) from social media platforms as well as the level of cross platform traffic. 
3. Increased Influence (Klout score) - Klout is one of a number of new-breed social media 'influence' measures that aims to measure how influential you are in social media. Increased influence can get you not only perks but higher visibility. Klout seems to have the edge over many other similar approaches (at least at the moment) as it measures over 35 variables to measure the size of your engaged audience, the likelihood that your messages generate actions and the strength of your network. One of my client recently started to recruit sales staff for their trendy shops based on people's Klout score. Here is a link to klout 

There are other social media indicators such as online share of voice or social networking footprint, which I discuss (together with the above metrics) in my latest book ‘Key Performance Indicators – the 75 measures every manager needs to know’. You can also find more information on all of these in our free online measures library: Measures Library

As always, I would love to see you share some of your social media measurement experiences and stories. What other metrics do you find useful? Or maybe you feel that measuring social media is not possible? What are your comments??? 

Also, as we are talking about social media, feel free to connect

On LinkedIn:      www.linkedin.com/in/bernardmarr

On Twitter:        #bernardmarr

On Facebook:   www.facebook.com/apinstitute

On YouTube:     http://www.youtube.com/user/bernardmarr?feature=watch 

Finally, for LinkedIn specific metrics, check out my other recent article '8 Measures of your LinkedIn Success'.

Measures, Dashboards and Analytics in the US Election

The presidential race was tight - or so we were told. What I found fascinating in the run-up to the election was the fact that no-one was sure enough to 'call it', to say who is likely to win. At least this is what the news presenters kept telling us. I found that hard to believe considering that they had access to the most sophisticated analyses and all over the world data crunchers  were looking at every little trigger and every new development, trying to see whether the Hurricane Sandy had shifted preferences or whether Diet Dr.Pepper, or the latest speeches in the swing states had had an impact.

What I am asking myself is whether this was Election Analytics Overkill? How comes that we have all the latest big data analytics, the most modern analysis software, and the shiniest election dashboards and we are still unable to predict an outcome? 

In my job I help companies to create measures, dashboards, analytics solutions and performance monitoring approaches and what I am always preaching is that we have to make them meaningful. Unless they are telling us something they are useless and we are better off not having them!

Having great analysis and pretty dashboards is meaningless unless they help us answer our unanswered questions or provide us with information that guides our decision making. No doubt, the Obama and Romney camp have both analyzed every bit of data to the smallest level of detail and both have employed analysts to find the critical bits of information they can use to make a difference. Why is it that we have the best analysis, the best dashboards, the best software and yet we can’t seem to get meaningful insights?

 Here are some interesting articles and great links:

• A great electoral dashboard
• An artilce in Forbes looks at how big data analytics have been used in the election
• Here is an analysis to see whether hurricane Sandy blew Romney off course

• This Forbes article discusses whether Diet Dr.Pepper, Pepsi, and Big Data determine the outcome of tomorrow's election
• And some election analytics from the university of ellinois

My question to you though – why is it that we have the most sophisticated analytics and still no insights? Is it maybe that people want to make us believe it is a tighter race than we think? I feel that the data was much more insightful and predictions could have been much clearer. I was in the US just before and on election day and all the betting shops had made up their minds. They obviously looked at the data and used analytical models to predict the high likelihood of Obama to be re-elected as president. Maybe it's time to rely less on opinions and more on facts! While journalists obviously had an interest in making us believe that the race was neck-to-neck (to boost viewing numbers) there is a lesson here for all of us: good analytics and facts will cut through any hype. This should be an important reminder for any business too - start looking at fact-based decision making - it works!

Here  is a great article that I just stumbled upon and which i think makes the point very eloquently: Big data spells death-knell for punditry

Measuring Social Media Effectiveness - here are 4 KPIs to start with

Even the most technophobe businesses are recognizing the potential and importance of social networks such as Facebook, Twitter and LinkedIn to their future business success. Because of this companies spend increasing time and resources exploring, growing and contributing to such networks.

However, the point I would like to make here (and I have made in my books) is that all of this is a complete waste of business time unless you are crystal clear why you are doing this and what business benefits you aim to generate from it.

It is my experience that most businesses have no clear social media strategy and therefore no clear metrics of success. In the absence of this, they track the over-simplified metrics such as the number of likes on Facebook, the number of connections of LinkedIn and the number of followers on Twitter. 

The beauty of all these social media platforms is that you can measure most things very accurately, so here are some examples of better metrics (which I discuss in more detail in my book ‘Key Performance Indicators – the 75 measures every managers needs to know’:

1. Conversion rate - most business want to ultimately sale something and therefore a sales conversion measure would be good, i.e. how many sales were generated by people coming to you through social media platforms. However, sometimes conversion can also mean people signing up for a free service or making an inquire. What you count as a conversion is very much dependent on your business strategy. 
2. Online engagement – many businesses make a case that interacting with an audience and potential customers on social media networks creates a different level of engagement, i.e. customers get closer to a company or a brand (often on an emotional level) and interact with the company more frequently. Taking a set of metrics such as duration of visits, frequency of interactions, depth of interaction, etc. any business can create their own online engagement index.
3. Search engine ranking and traffic from social media platforms – even if customers don’t buy anything straight away, having a social media presence that drives traffic to your online offerings will help with your search engine rankings. Search engine providers like Google and Yahoo will increasingly take into account social media presence when delivering search results. A simple metric is increased website traffic (e.g. page views and bounce rate) from social media platforms as well as the level of cross platform traffic. 
4. Return on engagement – this basically measures the level of return you are getting vs the efforts, money and time invested in social media activities. Return on engagement will allow you to create a cost-benefit analysis to see whether the time interacting with people on social media platforms is justified and in proportion to the benefits derived from it.  A simple version of this that quite a few of my customers are using is cost per social media lead.

There are other social media indicators such as online share of voice, social networking footprint, influence measures such as the Klout Score. You can find more information on all of these in our free online measures library: Measures Library 

But please tell me which other social media metrics you find useful. Do you agree? Which ones would you add? Whcih ones do you use? 

Measures of Success – The 5 financial KPIs every manager needs to know

Key Performance Indicators (KPIs) are the vital navigation instruments used by managers to understand whether their business is on a successful voyage or whether it is veering off the prosperous path. The problem is that there are thousands of financial and non-financial metrics out there and most managers struggle to find the few vital ones that really matter.

Here I want to look at financial KPIs and share with you five key metrics I believe are vital indicators of financial health:

1. Net Profit - business exist to make money. Net profit is basically a measure how much money is left after deducting all costs and expenses. In most businesses the No 1 financial KPI!
2. Net Profit Margin – While the Net Profit is an actual number, Net Profit Margin will put this number relative to the total sales revenue and therefore enables us to compare it across companies. It basically measures how much profit a company makes for each dollar of revenue it generates.
3. Operating Profit Margin – This ratio will provide insights into operating efficiency and pricing strategy by putting the regular operating costs  of the business to the operating income. By ignoring income from non-regular business it provides an insights into how much money a company makes (before interest and tax) for each dollar of sales.
4. Revenue Growth Rate – Even though there are other factors to consider,  in most business the primary driver of ‘making money’ is to grow sales. Revenue Growth Rate basically measures the percentage increase in sales from one period to the next (e.g. annually).
5. Cash Conversion Cycle – A main reason why companies go out of business is that they run out of cash (this can happen even if they have strong sales!). Cash Conversion Cycle measures the length in time it takes for an organization to convert resource input into actual cash flow.

Of course, selecting the right indicators for your business has to depend very much on your strategy and strategic objectives. Indicators are only useful if they tell you answers to your most important strategic questions (for more information see our white papers on KPI design).

In my latest book ‘Key Performance Indicators – the 75 measures every managers needs to know’ I cover 18 key financial indicators together with key indicators for customer, sales & marking, operations, employee and CSR performance. For those of you who would like to browse my top KPIs (and see how to calculate the above metrics) have a look at our KPI library.

As always, I am interested in your thoughts. What would you say are your top finance KPIs? Which ones would you add to this list / which ones would you ignore?