INSIGHT: Google/Groupon is about data

It's all about dataA long time ago, I was in the office of a local media company executive talking about the future. As I tried over and over to explain the differences between Media 1.0 and Media 2.0, he kept saying, “I understand, Terry, but it’s still all the same game.” By that he meant that no matter how you slice it, making money online was still about audience, and those with the biggest audiences win.

Much has come and gone since that meeting, but one thing is for certain: it is most assuredly not the same game.

Groupon’s board of directors allegedly met yesterday to discuss an offer from Google to purchase the company. Not so coincidentally, Groupon launched “Groupon 2” Tuesday night, which is being touted by some as “the future of local commerce.” If that’s true, it’s a big problem for local media companies.

But that’s not why Google is interested in Groupon. This deal is all about data, lots of it, and it’s all local. This is what the pureplays understand that media companies don’t. The game has changed. It’s not about gathering audiences anymore; it’s about gathering data to provide targets for advertisers. This is where the money is, and traditional media is being left behind, because we’re too busy playing the same old game.

Remember that horizontal connectivity is the real business disruptor in the media space. Media companies still want to play the one‐to‐many game and view any information coming back as an annoyance. Here’s the secret to understanding the Web for media: horizontal connectivity doesn’t just mean audiences barking back at us; it means the ability to capture data about the barkers, data that can be used to make money a new way, through offering highly specific targets for audiences.

And yet we don’t play this game. We leave that to the ad networks and are content to just take a smidgeon of a cut from them.

Groupon went on a vigorous campaign this year of partnering with media companies to help them make money. Groupon didn’t really give a crap about the revenue share. All they wanted was access to the media partner’s database of users. So sophisticated is their algorithm that they know THE MOMENT that the return of email addresses and other data begins to slip, and when that happens, they’re no longer interested in partnering.

Data, folks, that’s what the Web is all about — data we can obtain from that two‐way, horizontal connection. Where are the innovators tapping this opportunity? Who’s building anonymous profiles, for example, of those predisposed to certain issues or those whose interests via an eclectic portal paint psychographic pictures for marketers? We don’t “serve advertising” anymore; we target highly specific groups, and the ability to assemble them is the real value, the secret sauce proposition of Media 2.0.

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  1. […] and traditional media is being left behind, because we’re too busy playing the same old game.” Read more. It seems from here that understanding local buying patterns helps establish a link in attributing […]

  2. […] But that’s not why Google is interested in Groupon. This deal is all about data, lots of it, and i… […]

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