–

Now we know you, dog!

MM: I’d like you to speak to the old Internet joke, “On the Internet, nobody knows you’re a dog.” It gets to the difference between the known person and inferred unknown person. How can you use longitudinal data about the inferred unknown individual and produce useful insights beyond “some one did x?” Can you take us through how you know that an inferred-unknown individual on the 12th of December 2008 was in fact same inferred-unknown individual of October 23rd?

Well, certainly from a unique identification standpoint, there are the old standby approaches. For example, cookies — which aren’t perfect, for sure. You put a cookie on someone’s machine, and they can delete it.

But many times, that’s a very viable approach. An individual — at least the same cookie — will return to the site and engage with you over a certain period of time.

I think though, in terms of your question of the black art itself… Pardon the short sales pitch, but one of the unique things about Targetbase is — again — our breadth and depth of analytical expertise.

I think if we excel in anything, it’s kind of getting back to that point of data agnosticism. To us, it’s all just data. We’re looking to apply methodologies and approaches. Many times, brand new — that nobody else has ever thought of — but oftentimes that have existed for some time. But using them in a unique context.

This is a good example. It’s one of our many approaches. It’s a good example of the latter — of using an existing methodology.

For example, one of the things that we pioneered with Southwest Airlines was the use of Bayesian Statistics. Bayesian Inference with web data.

Just a quick short version of what I’m talking about… Using a Bayesian approach as opposed to a classical statistical approach allows us to do a few things.

We can begin with subjective assumptions. To say that, “You know what? When somebody comes to our homepage, we’re going to assume that they’re there to buy a ticket.” For example.

But the approach that we take then is, everything that an individual does or doesn’t do — or how long they view a particular piece of content or what have you — is used as evidence to update the probability that they’re going to do what we expect them to do.

Take, for example again, Southwest Airlines. If you come to the home page, we can know just by looking at historical data that — let’s say hypothetically — 10% of people that hit the home page end up booking a ticket.

So when somebody hits the home page and they’re there for the first time, we say, ” Our expectation of you booking a ticket is a probability of 10%.” But then that person clicks on a particular piece of content, or they go to a different section of the site, and that probability is dynamically — in realtime — updated. To say, “We just went up to 15. Uh — we just jumped to 50,” et cetera.

So the approach is an ever-learning, ever-improving approximation of who an individual is and what they’re there to do. Again, that’s very much a foundational principle at Targetbase. That ever-improving approach.

I often use the analogy that we may start with a really grainy, fuzzy picture. But as we move forward, that picture becomes clearer, clearer and clearer. In fact, a quick side note… One of the things that impressed me the most in terms of our like-winded philosophy with Alterian was one of the early discussions we had.

They were running through some slides, and they used the analogy of a “fingerprint,” that was partially concealed. Slowly over time, it was being revealed. Of course, that analogy fits perfectly with this idea of, “You may only know a little bit right now. So you’re making an assumption with maybe relatively low confidence that it’s true.

But over time, you’ve increased the confidence. You increase what you know about an individual. You increase your predictive ability in terms of what they’re going to do.”

MM: Let’s move beyond cookies and other kinds of unique identifiers that a user may provide. I mean, it’s pretty clear that if I’m a Southwest customer and go to www.southwest.com, it doesn’t take more than a click or two to re-establish the fact that I’m a particular Southwest customer and link my current activity to a customer record. You’ve got now good longitudinal data in terms of what I’m doing and how I’m doing it.

Right.

–