Dr. Richard BenjaminsGroup Director BI & Big DataTelefonica

Big Data – From Hype to Reality

Telefonica

© 2014

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Overview

• What & Why of Big Data

• Opportunities of Big Data

• Privacy challenge

• Example application: Smart Steps

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What’s the big deal with Big Data?

McKinsey

Big Data

McKinsey

Big Deals

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Big Data is a hype

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But what is Big Data?

Dave Feinleib, Forbes blog

1. Big Data is Only About Massive Data Volume2. Big Data Means Hadoop3. Big Data Means Unstructured Data4. Big Data is for Social Media Feeds and Sentiment

Analysis5. NoSQL means No SQL

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Where does all the hype come from?

Google started it,

Yahoo open sourced it,

Facebook and others used

it,

but

McKinsey’s report took it to

Fortune500 Board

meetings…

Today, huge marketing budgets are being thrown at those two words,

driven by new business… no wonder all the noise!

2004: Google publishes Map Reduce paper

(link: here)

2006: Yahoo’s Doug Cutting open sources Hadoop out of his older search engine project Nutch.

(Link: here)

2011: McKinsey Global Institute

publishes report on Big Data’s market potential for business, reaching out of the tech. world

(link: here)

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Where is Big Data coming from?

Type of Big Data

OTT/Telco Cost of data collection

By product/ seeking

Batch/real-time

Differential?

Social media OTT Low Active Both No

Web logs Both Low Passive Both No

Network data (telco)

Telco High Passive Both Yes

M2M (sensor) data

Both High Active Both Might

Open data OTT Low Both Batch No

Transact. data Both Medium Passive Both No

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PI EconomyExamples of external useInternal use

Several business opportunities with (big) data

Different “business” models with different maturities and different risks

Leverage data to understand and

improve business (x/up sell, churn)

and products

Data = improved business

Recognize that digital data is

delicate (privacy) Turn that into an

opportunity

Data = risk = business

Insights that help improve

businesses and governments

Data = business

Leverage data for targeting users

with relevant ads and higher CTR and conversion

Data = better advertising

M2MSmart cities

Improve services

Advertising Access to insights

Become a gatekeeper of personal data

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But Big Data is also good for society and environment

H1N1 virus pandemicTelefonica used mobile data to measure the spread of a global epidemic (“swine flu”) in Mexico DF

To understand more about human mobility and the spread of epidemics through society, Telefónica Digital’s research team used anonymised and aggregated mobile phone call records to measure numbers of people visiting locations such as airports or universities.

The study found successful Mexican Government’s decision to shut down key infrastructures, reducing virus propagation by 10%.

2012 Earthquake in MexicoDimensioning emergency services in advance for an optimal response to natural disaster situations

After the magnitude 7.4 earthquake in Mexico DF, Telefonica researchers captured modile data records that once anonymized and aggregated allowed building visualizations of the density of calls in the differents part of the city, immediately depicting the areas most affected by the earthquake.

With Big Data tools like this, it would be possible for authorities to better anticipate contingency plans, dimensioning emergency services and placing them in those points where there is evidence that will be mostly needed in case of catastrophic events.

(Click images for more)(Click images for more)

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Privacy remains an issue

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There is increasing awareness of what customer data companies store

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The industry is learning by doing

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Are you aware where your data is going?

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To the US …

Europe’s leading analytics companies call upon European Institutions to replace Google Analytics

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....made better

Big decisions…..

1st product – “Smart Steps” for Retailers:

• Decide on store location

• Understanding store performance vs footfall

• Plan local marketing campaigns and track their impact

• Optimise resource planning – staffing/open hours

Smart steps, for retailers

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Retailers have questions...

I know the activity that goes on inside my stores. But what % of my target market is walking past outside? What is the opportunity that I am

missing?

I am a large supermarket owner and one of my

competitors has opened up down the road. I need to identify our battleground. Where is my competitor strongest and weakest?

Where should I locate my new store?

Where should I target loyalty or acquisition marketing

campaigns? Where are my customers coming from?

I need to manage my resources. When are my peak times? Could I be

operationally more effective if I changed my opening times?

Strategic Decisions

Performance Management

Retailers worry about …

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Case study with 4th largest UK food retailer

“Unlike some of our competitors, we don’t have a store card to tell us who our customers are, and how they shop our stores, which means we’re at a disadvantage in targeted marketing. Over-rewarding one loyal customer disadvantages us in investing in the next”

400 stores nation wide

Crawford Davidson: Customer Director at Morrisons Supermarkets:

“This increase in customers was achieved without any reduction in customer spend, and with an improved new customer activation rate. Overall there was a 150% increase in the amount of new or reactivated customers who visited Morrisons stores. This is a fantastic result.”

“Smart Steps identified many more suitable target post code sectors, enabling us to send promotional coupons to double the number of households”

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39%39

2G Network

3G Network

900 MHz

1800 MHz

2100 MHz

2013 4G Network

NETWORK DATA

The o2 mobile network has hundreds of cells to measure the trends in footfall across the country

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PRIVACY

ANONYMISATIONBefore Telefonica Dynamic Insights (TDI) receives the data, all personal information is removed. The data TDI receives are cryptographically hashed values

AGGREGATIONThe hashed values are aggregated into groups, i.e. gender & age band. At this stage there are only crowds of o2 customers

EXTRAPOLATIONWe take our sample and extrapolate to population totals, using mathematical algorithms. This gives us the grouped values Smart Steps uses.

A 3 step process

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Easier to useFurther

protecting anonymity

Extrapolated to represent local

population

200 x 200 GRID

Footfall is rendered into 200 x 200 metre grid squares across the country

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Example question of a marketer

COUNT

What are the profiles of the people in the area of my store?

How does the footfall in our area change throughout the

day?

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Differential aspect

Export data and combine with other

sources

Today’s data tomorrow. Fastest data delivery in

the market

Insights 24/7/365. Data every hour, day, week

and month. You choose.

Intuitive web tool covering the whole of

the UK to draw insights from

Eliminates retailers’ blind spots. The profile of the footfall in their

area

Vast sample base based on observed crowd

behaviour

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And what about the Semantic Web and Data?

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Semantic web and data trends

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Semantic Web and Gartner’s Hype Cycles

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2006 – 5 to 10 years for reaching mainstream

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2009 – more than 10 years to go

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2012 – more than 10 years to go