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THE ALGORITHM ECONOMY JAMES (JT) TURNER @jamesturner247
HELLO, WE’RE BLACK SWAN
We help our clients work out what
will be important tomorrow….
We build algorithms that predict
consumer behaviour and software
to enable automation.
ONLY WITH THE RIGHT CONTEXT CAN WE MAKE
ACCURATE PREDICTIONS.
[Black Swan] n. common expression in 16th century
London as a statement of impossibility.
[Origin] from the belief that all swans were white, before
the first sighting of Australian black swans.
BY 2018, OVER HALF OF LARGE ORGANIZATIONS GLOBALLY WILL COMPETE
USING ADVANCED ANALYTICS AND PROPRIETARY ALGORITHMS, CAUSING THE
DISRUPTION OF ENTIRE INDUSTRIES. GARTNER 2016
CONUSMER BRANDS AND RETAIL BUSINESSES HAVE ALWAYS BEEN IN THE BUSINESS OF PREDICTION AND INFLUENCING BEHAVIOUR…
UNDERSTANDING PREDICTING INFLUENCING
BRAND
AWARENESS
SURVEY
DRINK
MORE MILK SALES FORECAST
JUST “LISTENING” IS NOT ENOUGH.
HOWEVER, WE NOW LIVE IN AN ALGORITHM ECONOMY…
More data than ever before,
algorithms, and real-time
automation are challenging
traditional marketing processes
The Internet is now the world’s
largest source of consumer insight.
Just listening however, is not
enough.
Traditional organisational structures create silos which make effective use of algorithms difficult.
SUCCESSFUL DEPLOYMENT OF BIG DATA REMAINS A SIGNIFICANT CHALLENGE
Many businesses are failing to
operationalise benefit from big
data, particularly data from outside
their own organisations.
AND CONSUMER BRANDS FACE EVER INCREASING PRESSURE
LOW GROWTH MARKETS &
DOWNWARD PRICE PESSURE
SHARE LOSS TO
INNOVATIVE START UPS
MEDIA
FRAGMENTATION
Never before has the need to
anticipate consumer preferences,
habits and shopping behaviour
been so important
WE WORK FOR SOME OF THE WORLD’S BIGGEST BRANDS TO HELP SOLVE THIS CHALLENGE
• 9 OFFICES WORLDWIDE
• OVER 260 PEOPLE
WE HELP OUR CLIENTS WORK OUT WHAT IS IMPORTANT TOMORROW
We combine cutting edge data
science, software development and
industry expertise to accurately
predict trends in consumer
behavior in order to gain
competitive advantage through
more effective brand activation.
WE IDENTIFY & EVALUATE
DIFFERENCE
Connected consumer output
across multiple channels
WE START WITH DATA
LONG TERM TRENDS
SHORT TERM TRIGGERS
AND CREATE ALGORITHMS
AND SOFTWARE
CASE STUDIES USING TRIGGERS AND TRENDS TO APPLY PREDICITON
THE CHALLENGE
Creating successful new product
innovation is expensive and has a
high failure rate in FMCG
THE OPPORTUNITY
Is there such a thing as a new
idea? With the huge mass of
consumer opinion now available on
line, surely it’s just a case of finding
the right one?
THE RESULTS
Predicting success from over
30 MILLION CONVERSATIONS
NEW PRODUCT DEVELOPMENT CREATING SMARTER INNOVATION
WHAT HAPPENS
A
B B
C
A B
Predicting success
30 million conversations
Results
The conversation
Idea generation
Segmentation
Trend audit
EVENT PREDICTION FOR SUPPLY OPTIMISATION
Store data
WHAT HAPPENS
Promotions data Weather &
environmental data
Daily supply forecast
10% THE RESULT
MORE ACCURATE
THAN MITSUI’S
EXISTING MODEL
Forest regression
model.
THE CHALLENGE
Mitsui’s Retail System Service
business supplies thousands of
7-11 stores across Japan. Black
Swan was challenged to build a
predictive supply chain model which
was more accurate than Mitsui’s
existing approach.
THE SOLUTION
Ssales, promotions and store data
were unified with external weather
and environmental data and
modelled using a customised
random forest regression model.
HYPER LOCAL MEDIA ACTIVATION PREDICTING COLD & FLU ALLERGIES
THE CHALLENGE
Deliver increased relevancy and
greater media efficiency through
targeted digital media.
THE SOLUTION
A dynamic algorithm designed to
drive media & retail activation.
PUBLIC
• Weather
• Social conversation
• Search behaviour
• Government Statistics
PRIVATE
• Store level Sales data
Predicted high risk areas for the
spread of cold and flu at zip
code level 4 days ahead of any
local authority advice.
Direct integration with digital
media ad platforms (Google
DFA, Facebook) for hyper local
targeting & content
optimization
Local prediction used by sales
rep to increase in-store
visibility.
DATA MODEL
INPUTS
ALGORITHM
OUTPUT
AUTOMATION &
APPLICATION
12% SALES UPLIFT
LOCATION
TARGETED MEDIA TO
9M CONSUMERS
THE RESULTS
500,000+ consumers engaged with
the flu tracker application
Geo-targeted media reached
9,000,000 consumers.
200% uplift on benchmark CTR
12% uplift in sales
HYPER LOCAL MEDIA ACTIVATION PREDICTING COLD & FLU ALLERGIES
THANK YOU