I wont be surprised to see a new subject being taught as a course in a business school very soom on Googlenomics or clickonomics, simply because of the creation of equivalent indices used in the digital world, which is only becoming pervasive as the mobile smarts are becoming ubiquitous.
To talk about Keyword price index (KPI), one can see its definition to mirror itself to the CPI. Here every user/surfer is the customer. Since it is almost to safe to say that almost all of us use search engine dominated by Google, the clickonomics will result in solid and safe predictions by product usage, a certain usage etc.
I am awed to see how GOogle is able to build robust and continually evolving complex algorithms along with statistical methods to predict quite accurately usage.
This firmly leads me to believe that there will be one day so much data that a quantitative analysis class will start building case studies on this as well as enough to determine supply and demand curves in the area of clickocomics. All this will only serve to build future theories, which I strongly believe that economists are certainly looking into it while I also believe that right now, it is at a stage where the surface is barely scratched.
Friday, May 27, 2011
Week 6: Googlenomics
As we are nearing the end of this class, let me begin this blog by first commenting 'Understanding googlenomics - a fusion of math, computer science and the concept of supply and demand!! What a way to end this class. Awesome!'
Yes, the bottom line of googlenomics is a fusion of math, computer science and the concept of supply and demand.
Very impressive to see the then entrepreneurs in the early 2000s to think totally out of the box to create a disruptive market in a very established area of advertising. Even though this the secret sauce of Google, understanding the magnitude and the complexities of algorithms of prediction and extracting signal from noise, a challenging and a daunting for a statistician is a differentiator that will hold high and tall for a long time, even though its competitors such as Yahoo and Microsoft are building inroads to the concept.
It is fascinating to see someone using the concept of game theory and Nash equilibrium, something I learnt in micro-economics to implement Google's risk taking idea coined 'Adwords', its unique method of selling online advertisements using auctions going on real time.
I can see why Google is OK with making many of their apps and especially their Android operating system as an open source platform. All of this has to do with the end goal of having more users using the Internet benefit them.
Yes, the bottom line of googlenomics is a fusion of math, computer science and the concept of supply and demand.
Very impressive to see the then entrepreneurs in the early 2000s to think totally out of the box to create a disruptive market in a very established area of advertising. Even though this the secret sauce of Google, understanding the magnitude and the complexities of algorithms of prediction and extracting signal from noise, a challenging and a daunting for a statistician is a differentiator that will hold high and tall for a long time, even though its competitors such as Yahoo and Microsoft are building inroads to the concept.
It is fascinating to see someone using the concept of game theory and Nash equilibrium, something I learnt in micro-economics to implement Google's risk taking idea coined 'Adwords', its unique method of selling online advertisements using auctions going on real time.
I can see why Google is OK with making many of their apps and especially their Android operating system as an open source platform. All of this has to do with the end goal of having more users using the Internet benefit them.
Sunday, May 22, 2011
Week 5: Moving to a different plane in web analytics
Traditional web analytics as defined by wikipedia is a microcosm of what is expected to continually evolve with increasing numeratis in Google, Twitter etc.
Web analytics is the measurement, collection, analysis and reporting of internet data for purposes of understanding and optimizing web usage.[1]
Web analytics is not just a tool for measuring website traffic but can be used as a tool for business research and market research. Web analytics applications can also help companies measure the results of traditional print advertising campaigns. It helps one to estimate how traffic to a website changes after the launch of a new advertising campaign. Web analytics provides information about the number of visitors to a website and the number of page views. It helps gauge traffic and popularity trends which is useful for market research.
As seen above, the current definition is akin to simple tasks that consulting companies are focused on i.e. proliferation of analytics for coporate strategy level problem solving. Yet it is a very very long way away when these tools can supplement behavior i.e eliminate humans needing to make decisions. Digital marketing is the only area that is getting close to tthis realization even though one can say that it is still a few years away.
Web analytics is the measurement, collection, analysis and reporting of internet data for purposes of understanding and optimizing web usage.[1]
Web analytics is not just a tool for measuring website traffic but can be used as a tool for business research and market research. Web analytics applications can also help companies measure the results of traditional print advertising campaigns. It helps one to estimate how traffic to a website changes after the launch of a new advertising campaign. Web analytics provides information about the number of visitors to a website and the number of page views. It helps gauge traffic and popularity trends which is useful for market research.
As seen above, the current definition is akin to simple tasks that consulting companies are focused on i.e. proliferation of analytics for coporate strategy level problem solving. Yet it is a very very long way away when these tools can supplement behavior i.e eliminate humans needing to make decisions. Digital marketing is the only area that is getting close to tthis realization even though one can say that it is still a few years away.
Week 5: Web analytics
The articles I read this as posted in the class folder has an interesting issue that is currently being resolved if not need to be addressed based on our web surfing, whether it be using smart phones or laptops, tablets etc.
Let me bring up the classic example of Pandora, an online music streaming service app that brings you close to this realization. This app atleast on the surface appears that it has trained itself to figure out what your music likings are. Similarly, based on my professional content viewing, the emails I get have changed over time from my previous job to the current one using my viewing pattern.
All this is reflected in the all math concept introduced by Google about 15 years back labeled as the numerati. The challenge is that achieving perfection is almost impossible beacuse this involves a lot of behaviorial topics which is highly non-linear. This means that putting together mathematical models is tremendously challenging, if not very difficult and daunting. For the internet to guess what your next mood pattern will be is highly nontrivial. Using past data will give one more noise from statistical analysis because of the multi-variable non linear behaviour.
At a professional level, companies like IBM, SAP are coming up with their decision making corporate level engines that are coined as analytics. These are relatively easier to tackle considering fewer constraints compared to an individual.
Let me bring up the classic example of Pandora, an online music streaming service app that brings you close to this realization. This app atleast on the surface appears that it has trained itself to figure out what your music likings are. Similarly, based on my professional content viewing, the emails I get have changed over time from my previous job to the current one using my viewing pattern.
All this is reflected in the all math concept introduced by Google about 15 years back labeled as the numerati. The challenge is that achieving perfection is almost impossible beacuse this involves a lot of behaviorial topics which is highly non-linear. This means that putting together mathematical models is tremendously challenging, if not very difficult and daunting. For the internet to guess what your next mood pattern will be is highly nontrivial. Using past data will give one more noise from statistical analysis because of the multi-variable non linear behaviour.
At a professional level, companies like IBM, SAP are coming up with their decision making corporate level engines that are coined as analytics. These are relatively easier to tackle considering fewer constraints compared to an individual.
Saturday, May 14, 2011
Week4: Twitter could be the bellweather for the new business models
In the new digital ma rketing era, I see Twitter as the one that could be the trendsetter or the bellweather given the short and to the point feeds as well as its convenience towards its display in our smartphones which is almost getting to be ubiquitous. All the marketeer needs to do is to post the link or a short sentence on a new product or a new sale or bonanza deal. Twitter, as the CEO was alluding to, could use this marketing campaign as the main source of revenue, especially when the marketeer doesnt have to spend large sums of money for campaigning other than paying digital providers such as Twitter.
Quite honestly, I never used Twitter before this class. However when we had our first asssigment in this class a couple of weeks back, the company that we were following which was Whole Foods got me following my own company Texas Instruments which I learnt key products and training websites for quick learning and updates. Amazing!
Quite honestly, I never used Twitter before this class. However when we had our first asssigment in this class a couple of weeks back, the company that we were following which was Whole Foods got me following my own company Texas Instruments which I learnt key products and training websites for quick learning and updates. Amazing!
Week 4: Riding the service economy and other factors
I want to make a general comment as why to these new age digital business models are gaining attention and showing successes. It is because it thrives well in a service based economy, atleast in th e US which has transformed over the last few decades to one from a manufacturing one.
Is that true for China which is perhaps the largest manufacturer in the world? Even though these models exist there, it is certainly not dominant.
Also, the other reasons for these models to thrive would be the free 2 way digital traffic that is not monitored by the government. I am not sure if this is quantified but it certainly can be restricted by the government or some dominant forces that could be a monopoly with a strong political influence.
Is that true for China which is perhaps the largest manufacturer in the world? Even though these models exist there, it is certainly not dominant.
Also, the other reasons for these models to thrive would be the free 2 way digital traffic that is not monitored by the government. I am not sure if this is quantified but it certainly can be restricted by the government or some dominant forces that could be a monopoly with a strong political influence.
Week 4: The Pandora experience and the zero cost model
Let me share an experience of the one that was discussed in the podcast and the Factiva article in WSJ on
Essay: The Economics of Giving It Away. The discussion was 'How do companies generate something from nothing?
The professors talked about WSJ teasing the free customers into buying the subscription using the subscription model, perhaps the most common business model after the advertising model.
I am an avid music listener on my iPhone and the my best app is the Pandora. This is a music (radio?) app that caters to any music taste one has. It keeps feeding in full music of any type. It also allow you to bookmark a track that you like. The ony caveat is that when you start as a free user (the most common way for any internet based application) if you search for an artist or a song etc, it does not necessarily play that exact song, but close enough either from the same band or a similar band. Once initiated, you create a station and it keeps playing full songs of that flavor, For example, I love the Beatles and it keeps playing Beatles or band similar to them in that station with some interlude of ads popping up now and then. Very often it tempts you to become a paid customer where the benefit is that you can now get that track and skip ads. Bookmarking a track for a free subscriber is just a sample of that song. The point here is that over time, you get so used to listening to your favorites that the model believes that you will end up becoming a paid subscriber thereby generating revenue for the company.
This is exactly what the Twitter CEO mentioned in the podcast. Even though the paid subscribers may be minority, the total number is still in millions and a small fraction of them is enough to generate revenue which equates to profit since the cost is amost zero.
Essay: The Economics of Giving It Away. The discussion was 'How do companies generate something from nothing?
The professors talked about WSJ teasing the free customers into buying the subscription using the subscription model, perhaps the most common business model after the advertising model.
I am an avid music listener on my iPhone and the my best app is the Pandora. This is a music (radio?) app that caters to any music taste one has. It keeps feeding in full music of any type. It also allow you to bookmark a track that you like. The ony caveat is that when you start as a free user (the most common way for any internet based application) if you search for an artist or a song etc, it does not necessarily play that exact song, but close enough either from the same band or a similar band. Once initiated, you create a station and it keeps playing full songs of that flavor, For example, I love the Beatles and it keeps playing Beatles or band similar to them in that station with some interlude of ads popping up now and then. Very often it tempts you to become a paid customer where the benefit is that you can now get that track and skip ads. Bookmarking a track for a free subscriber is just a sample of that song. The point here is that over time, you get so used to listening to your favorites that the model believes that you will end up becoming a paid subscriber thereby generating revenue for the company.
This is exactly what the Twitter CEO mentioned in the podcast. Even though the paid subscribers may be minority, the total number is still in millions and a small fraction of them is enough to generate revenue which equates to profit since the cost is amost zero.
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