Category Archives: Uncategorized

What to learn from Facebook’s secret psycho test

A study that was published already a while ago is a topic of hot discussion now – see e.g. here: http://qz.com/227869: Facebook filters the news feed to bring up the content that algorithms determine to be the most relevant ones for the individual. This filter had been tweaked for a scientific study that tried to figure out what an impact more positive or more negative news do have on the individual. Not surprisingly, emotional content led to a higher engagement and had a contagious emotional effect.

This kind of use is seen to be covered by the terms of service that each user agrees to when signing up for Facebook. Nonetheless, Facebook is hit by criticism and many comments on the web are full of sarcasm (like e.g. “how could you be surprised?”).

One key concept here from an ethical perspective is what is called “informed consent”: when you agree to the terms of service, are you aware of what these terms could mean in all its consequences? Any company that aims at a high profile of social and corporate responsibility should take this into account from an information governance perspective. This is a key obligation for the new role of the Chief Data Officer, CDO.

Secondly, my claim would be that there’s something we might call an “implicit consent” that a company can deal with to rule out what is a no-go with respect to data privacy. If we are looking at the web site of a shop, say Amazon, we would not be surprised to learn that the product recommendations aren’t there for our benefits only (e.g. a better service), but also for the benefit of the shop (more sales). In a way we recognize and expect there’s an attempt to influence our behavior and most of us think we can deal with it. At least we haven’t seen much of a heated debate about that. The difference with the Facebook story is that we read about some users being the guinea pigs in an attempt to influence their emotional state. This touches a deeper level and sphere of our self than the behavioral level. A region of our self that we are way more keen to protect. There’s no way to assume an implicit consent for that. At least not in the European culture that I live in.

Data Privacy – A Clash of Cultures?

How much data privacy is appropriate with respect to the prevention of terror threats? The U.S. and Europe seem to have very different views. In a very interesting essay in the German journal FAZ (Kampf der Kulturen (Clash of Cultures), Frankfurter Allgemeine Zeitung, Nov. 28th) Russell Miller, Professor of Law at the Washington and Lee University School of Law and Ralf Poscher, University Freiburg, stated that there’s a fundamental difference between the traditions of law in the U.S. and Europe. The view in Europe is largely shaped by the experience of totalitarian regimes in the 20th century. In a nutshell, Europe is outspoken against pre-emptive data collection as this data could be mis-used later and often has been mis-used in the past. From a U.S. perspective, however, Miller and Poscher argue, law develops by case and as long as no harm has been done there’s no need to change. In the past, the free press in the U.S. has been the fourth power that uncovered misuse in case it happened and the legislation took action accordingly – as e.g. in 1974 when Seymour Hersh uncovered the misuse of data illegally obtained by the CIA and the Church Committee thoroughly investigated. In that sense, Miller and Poscher observe, some U.S. politicians are now taking a different view as they question whether the political damage that occurred as it became known that Angela Merkel and other European leaders have been wiretapped isn’t outweighing the benefits for the U.S.

In the meantime, U.S. courts have dealt twice with the question whether bulk metadata collection is illegal, see e.g. Forbes: “Now It Gets Interesting, We’ve One Court Stating That The NSA Data Collection Is Legal, Another Illegal”. The judge in Washington D.C., Richard J. Leon, stated “I cannot imagine a more ‘indiscriminate’ and ‘arbitrary invasion’ than this systematic and high tech collection and retention of personal data on virtually every single citizen for purposes of querying and analyzing it without prior judicial approval,” which would most likely infringe on the “that degree of privacy’ that the founders enshrined in the Fourth Amendment.” The New York judge however said “The right to be free from searches is fundamental but not absolute. Whether the fourth amendment protects bulk telephony metadata is ultimately a question of reasonableness.”

If Miller and Poscher are right then the outcome of the inquiry whether this data collection is illegal or not is not at all clear, unless some real damage will be uncovered.

Pushing the boundaries of customer insight – art of the possible in Marketing

Marketing can now understand each individual’s personality, needs and traits at scale

If understanding each customer as an individual is the new imperative – the question is how to do that. There’s innovative technology from IBM Research that can do just that on unprecedented levels of depth: Social Media analytics that allows to develop a psycho-linguistic profile. This will help marketers enhance and personalize their dialogue with prospects and clients. Sales Leaders will be enabled to identify new leads  from Social Media in an unparalleled depth and increase their revenue.

See here:

IBM Watson – it’s real and it will transform client experience

Yesterday we had an analyst briefing where we went deeper in what we currently do with clients and some of the fundamental innovations behind Watson. The marketing may sometimes sound to glorious to be truthful and creates expectations that are too high – like – oh my god, if Watson can do anything and answer every question, no expert is needed anymore. Well that’s not the case…

But it can enable companies do much more work to get better and more charmingly engaged with clients – than with today’s kind of online self-help or call center service. To do so, Watson needs a couple of capabilties. Some of these were built in a scalable and componentized way for the Jeopardy! game, some need to be adapted or created for each new domain where Watson goes to work. To give an example, Watson needs to be trained on the specific domain of knowledge (e.g. medical expertise on cancer diagnosis and treatment or customer service in telco or banking) plus on the company specific knowledge and language. That’s an area where Watson indeed goes to work now, see e.g.: Watson at Your Service: IBM Unveils the IBM Watson Engagement Advisor  and the video Announcing the IBM Watson Engagement Advisor.

I’ve just come across an amazing example of a superior customer centric service – delivered in a 21st century social business fashion: the McDonalds Canada “Our Food, Your Questions” program launched in June 2012. See this great summary article: “Marketing, With A Side Of Truth: The Secret McDonald’s Recipe For Canadian Success”.

I would not expect Watson to answer all of these questions – a lot of those are requiring research and knowledge acquisition in the first place – which is what makes this really authentic. But given the enormous amount of questions asked and answered before, this would make a great source for Watson to reply on questions that are similar to some asked before – based on the understanding of the meaning of the question, not just the keywords. Just think of the shortcomings of searching for an answer that’s certainly be answered numerous times before. Answers spread in many places… and maybe not retrievable by a simple keyword search. This is the kind of cognitive computing that Watson can do… given some preparation and training. And more work and effort could be done by the company (McDonalds in this purely hypothetical and illustrative example) on researching for answers where Watson doesn’t find a clue in the existing corpus of knowledge.

“Science determines the limits of the possible. Engineering lets us reach them”, Clifton Leaf.

Where Does Privacy in the Internet end? – On Global Differences And What to Learn from Prism and the Sauna

Rolf Schwartmann, Professor at the Cologne Research Institute for Media Laws, wrote on Friday 12th July 2013 in the FAZ (Frankfurter Allgemeneine Zeitung, “Freies Surfen”) about the considerable legal differences between different countries.

In Germany, every citizen has to approve to any processing or storage of personal information. This processing or storage has to be tied to a specific usage. This is secured by consitutional laws. Exceptions to this need to be authorized by a court on an individual basis and require important reasons by the law enforcement agencies.

In the U.S. on the other hand, privacy is by the consitution only secured as an appropriate expectation (“angemessene Erwartung”, Schwartmann). As soon as information is handed over deliberately to a third person it is no  longer considered as private. Moreover, data privacy of U.S. citizens is overruled by national security concerns. All non-U.S. citizens do not have any data privacy rights from a U.S. perspective.

Three things are obvious here:

  1. There are cultural differences regarding data privacy
  2. There are legal differences regarding data privacy
  3. There’s differences in how internet users from different countries are treated

The cultural and legal differences may have to do with historic experience of Germans – e.g. with the Gestapo or Stasi. Americans on the other hand put more weight on national security.

With respect to the european view on data privacy, a comment from Jeff Jarvis is quite interesting. In 2010, when data privacy and Google Streetview were discussed, Jarvis ridiculed the Germans as beeing paradox, as they have no problem to go to the Sauna naked but do have a problem to have a picture of their house on the internet. Here, the interesting point is asymmetry: In the Sauna you see what I see and no one of us will take something seen outside in form of a picture. But you don’t know who will be looking at your house on Streetview.

Social networks for professionals, like linkedIn and XING, deal with that idea of symmetry: If you want to see who looked at you, you have to pay.

Conclusion: Data Privacy is always about a perceived symmetry between give and take (e.g. take privacy for security) which has to be accepted by the individual. For a global business it means, that data privacy has to be dealt with “glocally”. Data privacy has to be considered not only from a legal but above all from a cultural perspective and cultural differences have to be understood and dealt with.

Connected Car – What Does it Mean to Primary Insurance?

In-car telematics will grow considerably in adoption over the next couple of years. The automotive industry is embracing it and the European Union has put it on its Digital Agenda – under the name of eCall.

A recent overview of what the connected car means for the Insurance Industry can be found here. Some of the ideas and numbers in there date back to 2011. Despite the fact that these ideas are around for a while, Insurance – at least in Germany – is slow in embracing this new model. Here’s two main reasons that are given:

  1. Fear that the new tariff would cannibalize existing revenues
  2. Experience or market insight that drivers would not trade a limited reduction in price for the inconvenience to adjust their driving behaviour.

Maybe there’s huge regional / national differences with respect to this attitudinal issue. In any case it is interesting to see that there’s successful insurance startups leveraging the Pay-how-you-drive business model… They obviously don’t have to cannibalize their existing offerings – and they have a good value proposition for young drivers – who would pay much higher premiums elsewhere.

What if the bigger concern might be even deeper? Imagine a world of intelligent cars that avoid the majority of crashes? What’s the future of the car insurance then? As premiums have to cover the insured loss this would at least have an effect on overall revenues… unless there’s new markets where there’s still a growth in automotive sales to drive more revenues.

Troublesome Big Data Experiences Related to Privacy

Big data has already permeated our every-day life. The most recent news however deal with growing concerns about privacy. Most prominently the NSA prism story uncovered by the Guardian.

Other news didn’t catch the same amount of public attention although they go in the same direction. To name a few examples that I came across recently: Cisco annoyed users last summer with a new anti-porn service which created privacy concerns, see e.g. here. Cisco listened to its customers and changed the policies accordingly. More recently, Microsoft was alleged to read Skype chat messages (see e.g.: Is Skype snooping on your conversations? as well as Microsoft liest heimlich Skype-Chats mit). And then we read the Xbox is suspected to spy in our livingroom: What we think we know about what Microsoft isn’t saying about the Xbox One. 

Interestingly, we could learn in May that Whatsapp had reached 250 million subscribers, despite the fact that it is not in line with international privacy rules and laws. It transfers and stores the complete list of contacts of its users to its servers. See e.g.: WhatsApp in violation of privacy law

The difference in the amount of public concern in these cases seems to correlate with the different amount of perceived benefits. Consumers seem less scared or pay less attentionif they see the benefits. (The Cisco case wouldn’t probably have made such a relatively big story if it wasn’t for the added inconvenience of configuring the device)

But this is by no means a simple recipe for corporate success – if searching for deeper customer insight with the help of big data. The damage to reputation might be considerable. Each company is well advised to follow a well-planned, responsible and sustainable strategy regarding the use of personal information. Consumers and legislation will pay attention and even if your company took corrective action, the negative consumer reviews would still be out there on the web for a long time to come and influence other’s buying decisions.