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Data Management in the ‘Internet of Things’ Era

Date: October, 2014 -- Management in the ‘Internet of Things’ Era

The “Internet of Things” is here. In fact, it’s been here quite a while. One of our colleagues recalls living in Tokyo in the ‘70’s and never seeing a meter reader at his apartment house. The electric company could read his meter remotely. What they didn’t do was bill him electronically, that still came in the mail. 

But what was lacking in the ‘70’s is here now: ubiquitous and cheap sensors turning behaviors into Big Data, enormous and nearly free computing capacity, and a population of tech- and Internet-savvy people innovating seemingly at the speed of light and predicting our behaviors. 

Today, “Smart” equipment with digital sensors connected to a digital communications and computing network can provide service choices to us, and even provide service without our having to make conscious choices. In the ‘70’s our Tokyo friend had to come home to turn on his air conditioner. Today, he can use his mobile phone to check on the temperature and humidity and even instruct the AC in each room when to turn on.

It won’t be long before he won’t even have to do that because the system in his apartment, or the electric company, will “learn” his habits and set the temperature and humidity to the behaviors he has demonstrated, having first checked with the sensor in his office that he had left at his usual time. On Tuesday and Thursday when he goes to the gym, of course, the temperature is cooled an hour later if, but only if, he checks into the gym at his normal time. 

Also, the house sensors could detect when there are visitors, sensing more body heat, and adjust the temperature accordingly. If he has a regular poker game on Fridays, the system will accommodate that in anticipation of more people and more smoke, while the refrigerator will order more beer and the freezer will fill up the ice bucket. Sounds like sci-fi, but this is no fantasy.

The challenges and opportunities for database creation and use for direct mail and other forms of data-driven, response marketing are compelling proof of a profound change in this business.

The USPS is capable of recording how many letters you send, to whom, to where, when, how many are misaddressed, and what you get in return. They use complex algorithms to plan work schedules and equipment locations depending on the system demands, all predicted on the basis of what Big Data shows.

While we are confident they only use this data to plan staffing, equipment needs, transportation scheduling, and other operational needs, it would not be a long step to begin mining this vast data set on Americans’ written communications habits for commercially valuable insights.

 For example, the data on magazine title deliveries by mail route might show changes in “categories” of magazines in a neighborhood, or even an apartment building.  Those changes might be indicators of changes in the demographics of the neighborhoods. This in turn might be marketable intelligence for businesses looking for neighborhoods with a certain demographic. Perhaps the big data shows that Economist subscribers eat dinner out four nights a week and prefer not to walk more than two blocks to do so!  

With sophisticated mining of the Big Data of the USPS postal system, we could see mailers’ computer systems, the USPS equipment and even involved service providers actually negotiating in real-time. Listen to the computers talk:

                USPS network: “Catalogue Company C: I have a heavy delivery load in Los Angeles tomorrow, Tuesday; I’ll give you a 5% discount to deliver your 5,000 pieces on Wednesday.”

                Mailer’s computational system: “Agreed. Apply to next bill. When can I lodge the 5,000 for UK due for delivery Friday?”

                USPS: “Royal Mail, I can land it Thursday. Can you handle?”

                Royal Mail system: “Land before 6AM, Thursday, 7% discount. Later Thursday, regular tariff. Delay to Friday 4 to 6 AM, 12% discount.”

                Mailer: “Book Friday. Airline? Doable?”

                Airline system: “Present shipment at Terminal 13 Newark 10PM Thursday. Gate 22. No discount.  5% discount if you backhaul 6,000 pieces UK magazine for entry NYC.”

                Mailer’s trucker’s system: “Done”

This type of machine to machine dialog is now possible and this is just a basic example of possible benefits – albeit maybe not quite as cool as the earlier example of your refrigerator ordering more beer.  

So where does all this leave us from a privacy standpoint? The aforementioned examples are the non-contentious stuff, not the personal information we need to start worrying about. When enough personal information about an individual’s behavior and decisions is collected and compared with that of other people, increasingly accurate predictions of behavior can be generated, some of which might be very, very personal. 

This goes much deeper than “mail golfers over 30 read travel magazines, are in an upper income bracket, and like big cars”. This goes down to “80% of 30 something men and women who date three times will have a physical relationship, after four more dates 80% of the “relations” couples will become engaged”. 

We can see a “real-time” generated list titled “Dated Seventh Time Last Week”. And all of a sudden your girlfriend starts getting wedding gown and honeymoon planning magazines. And, by the way, that’s just the “general” prediction; the “detailed” prediction set will have probabilities for couples of all ages and races and life backgrounds. And then there will be the pregnancy calculations.

However the debate develops, we are certain the direct marketing industry, or whatever nomenclature it adapts, will be on the side of good taste and respect of the privacy limits which individuals will ultimately set for themselves. We are also certain that data-driven communications will continue to have the power of delivering useful information and offers on a timely basis, only more rigorously targeted. 

We know that contact data quality will still be an issue as people continue to change addresses, jobs, habits and everything else which makes our customers unique. And you can be sure that Data Services, Inc. will be there with cutting-edge capability to help you get your messages delivered to the right people in the right places, at the right time.