Are these predictive analytics like those we're used to for measuring things like lifetime customer value or propensity to churn?
Churn and lifetime value are important concepts but I think the field has moved beyond just those things. There is a new focus on unstructured content we get into, also social media, Twitter, Facebook and all the other verbatim data available. My ultimate goal is some kind of analytics that extracts, on an incremental basis, all the information it can from unstructured data and combines that with the information from structured data. That way you get some kind of internal validation that through people’s behavior you have found some trend and validate that through what they are saying. You are adding predictive power to your research.
What other types of marketing problems do the analytics address?
We use predictive analytics and predictive modeling of every kind. I cover artificial intelligence techniques, genetic algorithms -- things not typically found in marketing. It's applied to solve real problems like market basket analysis. It's very difficult to use any statistical technique to do market basket analysis, but an algorithm makes that much easier than doing it statistically. The focus is not on technique, it's on solving a problem. For instance, if your company markets a laptop and a printer, what will your customer buy next?
Are tools like SPSS accessible to a wider and less statistical audience now
Yes, certainly a lot of IBM commercial customers are using this, and among academics there are four or five U.S. institutions using the same software package. From their Information on Demand conference I see IBM is also interfacing elements of SPSS in Cognos and Netezza software, so people who like to use that software can stay with it and use advanced analytics. I also see other tools like SAS; their statistical software gets used a lot in insurance and banking and areas that are very actuary driven, but we don't see it as much in marketing.
We see the corporate demand for analytic skills growing, do your peers in academics also see an urgent need?
We are aware, but like I said, students are voting with their feet. I often refer to a McKinsey Global Institute report last year that suggested we are going to face a shortage of 140,000 to 190,000 people with these analytic skills. Students are sensing this. It's self-motivation and self-preservation in unsure economic times. They are reading industry reports and sensing that they need these skills.
Jim Ericson is editorial director of Information Management, a SourceMedia publication. You can reach him at Jim.Ericson@sourcemedia.com. Follow him on Twitter at @jimericson.
