Consider the possibility of a big data bubble. “The Big Short”, a film based on a book by Michael Lewis, shows how the housing bubble formed and how a handful of funds saw the risks in the mortgage market and took short positions against mortgage backed securities, financial instruments that were once thought to be a sure bet.
Since the burst of the housing bubble in the early 2000s, many have been on the lookout for the next bubble. Will we face another technology bubble, perhaps another crash of dot-coms? Possibly. But, it could be more likely that we will see a big data bubble. Consider for a moment the number of marketing and advertising technology companies that are developing software and platforms designed to manage, move and manipulate massive amounts of customer data. Think about the market of third party data providers.
Try to count the number of agencies, consultancies, and systems integrators that have added droves of data analysts and millions in fees for services like data strategy, integration, cleansing and analysis. Then, ponder the number of companies that are actively monetizing their customer data.
Big data, and the growing market that surrounds it, is based on the several assumptions:
- Consumers will continue to share data
- Consumers will continue to share data for free
- The data consumers share is “reasonably” accurate
But what if we’re wrong?
Recent shifts in consumer behavior suggest we could be approaching the end of days in terms of relatively consumers allowing relatively free and easy access to their data. Ad blocking tools and changing perceptions around privacy threaten marketers’ ability to leverage consumer data. Furthermore, consumers are becoming more digitally savvy. And, as their use of digital technology increases, so does their awareness of the value of their own data. Could we be nearing mainstream adoption of software that enables consumers to monitor and monetize their own data?
No doubt marketers will adapt to this situations. But what of the broader market around big data? How heavily invested are marketers in social networks, advertising platforms, media companies and technology providers that depend on big data? Can we unwind these positions? Equally important—where are the next arbitrage opportunities? Who will find these opportunities first? And, as in the case of the housing market, who will supervise these activities to prevent more nefarious characters from exploiting the market for big data and the consumers and households behind it?