Sunday November 22, 2020 |Future of ecommerce

The value of social data will decrease

Privacy and data issues in tech are generating an enormous amount of concern. This concern is generally both unfounded and wavering in its stances, and perhaps more concernedly, there's bipartisan pressure to regulate the way tech companies treat data. There's little mention of the ultimate negative effects, with the focus being on the fact that companies are collecting data.

Data is generated, not surfaced. It's used to inform decisions and data on its own isn't seeking some greater truth. All data has value only within the realm that it can be useful in reaching a final conclusion. It's increasingly more difficult to get an edge through data analysis because everybody is using it.

There's an argument to be made for pursuing more data to get further ahead. There are limits and it's apparent in baseball. It's no longer possible to get ahead on 'analytics' because every team is using advanced methods. There are a relatively finite number of major league caliber players available, and a nearly guaranteed set of outcomes in the end. At a certain point, the edge evaporates.

The same case can be made for social media data. It's no longer giving companies a verified advantage of competitors. Instead, going through big tech channels is merely the standard way to reach customers, much as newspapers and television were in the past. While these platforms have more insight into the users than those traditional means, it's not necessarily driving more results. At a certain point, there's only so much data can do, and it will never lead to a 100% correct decision.

Social platforms are under undue pressure from both lawmakers and the public. Advertisers feel hostage to a small number of gatekeepers who supposedly hold a magic 'algorithm' to direct people to the right place. With finite outcomes and a leveling playing field, the advantage of data is waning and may never prove higher than in 2020.

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