Open Networks & the Global Data Supply Chain

Data is the new currency. More and more, companies are turning their attention to creating new ways to generate consumer generated content (CGC). If you are successful, you can increase your value to shareholders beyond direct sales numbers. If you look at the biggest CGC networks in the world, you see some familiar names on the list.

Facebook (30 Billion viewed and shared CGC per month)
Twitter (15 Billion viewed and shared CGC per month)
Bazaarvoice (700 Million viewed and shared CGC per month)

Given what we know about CGC, the important aspect to much of this CGC is all about engagement. The old school thought of if you create the content, people will engage with it is outdated. Volume definitely drives engagement but the types of CGC that is generated is definitely an important factor. One thing I have seen is that certain types of CGC inherently have better engagement. The main types of content that drive engagement are:

• Content that resonates with a user’s online purpose
• Content that appeals to a user’s emotions
• Content that appeals to a user’s needs

Understanding what an open network allows is key to understanding the value of such a network. If you look at how most open networks function. It all starts with CGC generation. You need to have a source. The source is not the applications that collect, but the organization that is fed the collections. A company like Twitter is a source of data. It creates open services that allows 3rd parties to push data in and take data out of the network. But all data finds its way back to the source. The network gets bigger through more than just direct collection at twitter.com. The easier the access, the more data is generated.

Suppliers are further up the chain providing large amounts of aggregate data in bulk to companies that provide services. A company like GNIP was one of these providers of Twitter data and last year, Twitter acquired GNIP and was able to immediately monetize their own data. The goal of any supplier is to first create the CGC network, make it big enough to power entire markets and then monetize that data through bulk wholesale contracts.

Even further up the chain is the notion of service providers. Companies who take the CGC and enhance the value through services. Much of this happens by way of data analysis of behavior and user segmentation. Some service providers also find an industry and make applications that focus on servicing that industry. Much of the service value for the CGC comes from brands and marketers. Determinations of who is talking about what, patterns of behavior over time and understanding large segments of users can help forge new products, enhance new ones or just increase customer service. If you are interested in where all of this is going, read my blog post on “Reality Mining”

Source > Supplier > Service Provider

Ease of Access (Network Accessibility)

The most important piece of building an open network is continuously generating CGC. But once you have that it becomes very important for creating ways to easily interact with that content. The easier it is to access network content, the more content is generated. Analytics are a drug. Once you have it, and you start making smarter decisions based on it, you crave more. You can never get enough. Making data easily accessible for analysis is the key to growing the network. Twitter perfected this model by opening their network from the start. Facebook has also had a “semi-open” model by allowing access to data of only people you know and have access to. The main reason more companies use Twitter for analysis instead of Facebook is due in large part to all of Twitter data being public and easier to access.

Contribution leads to lower cost of ingestion

Reciprocation models should be used during valuing customer CGC contracts. If you are growing the network, you should be willing to accept the value of CGC in comparison to just a product revenue model. The more a customer contributes value back into the network, the less it should cost for them to pull data out. It is a typical process on getting clients to consistently contribute. The value of your CGC is a factor of the network as a whole. The health of an open network is determined by consistent contribution, validity of data and frequency of access. A contribution relationship creates clients who want to find new and interesting ways to get content on the network.

Analytics

Validation of network usage depends on consistent analytics. It is an old but reliable model. The more people that use your network and view CGC, the more value it has. Products are used to generate CGC, product revenue is secondary. Once you realize the value of the network and what people will pay for content (anonymous, raw and usage metrics), you could give away your products for free or a huge discount because the goal is to increase the network size. But nothing in an open network will be successful without analytics. It should be the primary focus when building an open network. People want proof, data is the only proof.

Securing data

Platform security is paramount. One slip and your credibility is gone. An open network should be simple and limited in access points. Ideally, the same access that you give to the world, you should use to power internal and external products. Its the way to hold yourself accountable from a security perspective. Simplicity is key. Infrastructure to scale is complex but the architecture that collects and reports data should be very lightweight.

Global Data Supply Chain

All CGC network providers become part of the global data supply chain. They are not competitors, they are part of an ecosystem that should work together to build more and more ingestion points. The market moves with providers as they evolve. We are just beginning to understand and use CGC and the global leaders need to build and create the global network of content to help usher in a new era of user demand. Users want things faster, the patience of searching has gone away. The market expects immediate answers and through all the largest CGC providers, patterns of behavior give way to new predictive models and interpretive features.

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CGC is key to an open network but understanding how data moves through that system, what data is accepted by the system and where new sources of data will come from is important to success. Always be willing to share data in order to get data. Volume is the measurement of success.