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Intro This is The Future, This Week on Sydney Business Insights. I'm Sandra Peter, and I'm Kai Riemer. Every week we get together and look at the news of the week. We discuss technology, the future of business, the weird and the wonderful, and things that change the world. Okay, let's start. Let's start!

Kai Today on The Future, This Week: part two of a special with Simon Kemp on the State of Digital.

Sandra I'm Sandra Peter. I'm the Director of Sydney Business Insights.

Kai I'm Kai Riemer, professor at the Business School and leader of the Digital Disruption Research Group. So, Sandra, what happened in the future this week?

Sandra Well something special. I'm not here. I'm away this week. Well not this week, but the week that this is going to air.

Kai So we have a treat for you today.

Simon Hi I'm Simon Kemp. I am the CEO of Kepios which is a marketing advisory service.

Sandra In a two-part special we have a closer look at the state of digital in 2019.

Kai This is part two. Last week we heard about what is going on on the Internet. Today we look into the role of data, what businesses can do with data, and the complexities of collecting the right data in the West, or indeed in China.

Sandra So I recently got the chance to sit down for an interview at Simon Kemp.

Simon Hello I'm Simon Kemp I'm the CEO of Kepios, which is a marketing advisory service. Our reason for being as a company is helping companies organisations around the world to make sense of what people do on the Internet. A big part of that is producing the Global Digital Reports which we publish in partnership with We Are Social and Hootsuite. A huge collection of data. Thousands of charts, 247 different countries, covering nine years’ worth of data so far ongoing. Anything you want to know about how people use the internet, social media, mobile and e-commerce in pretty much every country in the world.

Sandra So Simon, welcome to The Future, This Week. You're a Scotsman in Singapore who has worked for Unilever, for Google, for Coca-Cola, now does his own thing with over 10 million people having read your books having read your reports, and each year you produce the Global Digital overview which brings together tens of thousands of data points into over 500 charming slides that you're going to talk to us about today.

Simon Yeah I'm going to take you through every single one of those slides today.

Kai Well, some of these slides we've heard about in last week's episode when Simon outlined for us not only why the Internet is growing, and that the drivers are, you know, video translation and speech recognition, but also what people actually do on the Internet. And we heard that Yahoo is still a thing, we heard about gaming and eSports and Tinder. But he also very briefly mentioned another thing that is a thing on the Internet.

Sandra So this week's special is about the use of data, and where better to start than in the online adult industry?

Kai So adult entertainment, or porn, has often been the driver of new technology ever since Betamax and VHS, the adoption of DVD online streaming, the adult entertainment industry, has been at the forefront of not only driving technology adoption but also coming up with new ways of doing business, so to speak.

Simon If you want to talk about data and porn, it is actually very genuinely one of the most nerdy and amazing stories. So, the company that will remain nameless that's at number eight, which is an adult entertainment company, we know that they actually use our data reports, because they've got a great data arm.

Sandra Their whole business is data.

Simon Exactly. Understanding wants, needs and desires of the audience. But they've built this enormous long blog post, part of their business which is all about sharing the insights that they've learned from the data that they collect. I think you were talking about search earlier on. I'm going to remain professional and talk about this in a data perspective here. We went from the very early stages of searching for adult entertainment on the Internet, we searched for 'sex' and then we used a lot of words like profanities and whatever else, but it was very generic. I'm looking for content that's about sex. You look at the way that people search on these sites now it's incredibly specific. So I want three people in the following kind of setting wearing the following kinds of clothes.

Sandra On a Tuesday afternoon in the rain.

Simon Exactly, and I want this racial makeup of the trio, and it it's just incredible the level of specificity. And when you look at that user journey, oh my goodness I can't believe I'm talking about that in an adult entertainment context, but just the level of insights that those companies have built into how people find what they're looking for. If marketers could step away from the fact that it's adult entertainment and look at the journey that those users have gone on to get to that level of sophistication, it would help us understand how people buy shampoo and all the other really innocuous things in life. So much as it's a little bit sort of an awkward subject for most people to tackle at work. These companies have an amazing ability to analyse data and then translate it into value.

Sandra Is it possible that part of that is also the educational journey that the site itself has taken users on, in having more tailored content and more and more specific content and so on, and educating users in their preferences once it's found out a little bit about what...

Simon Yeah, this is absolute classic user journey activity you can look at this in any industry. It just so happens that the one that seems to have collected the most data and acted on it commercially is the adult entertainment industry. I'm not a fan of this industry, I just want to highlight that, but I admire what they've done with all of this data. So take whisky as an example here. So whisky is one of my passions, right, I love whisky. When you first come into whisky you search for 'whisky', and then you maybe realize that there's a difference between Scotch whisky versus bourbon, and so you maybe search. And then you realize that within Scotch whisky you've got smoky whiskies versus blends vs. single malts, and you go down this journey and eventually when you get super nerdy you're looking for a 1983, 15 year old, single cask version of this particular distillery. And you know exactly what you're looking for, because you've gone on that education journey. And I think what's really interesting is that...

Sandra Made by a Scottish guy on a Tuesday.

Simon So exactly that. And I think this is the interesting bit is that in many industries you've got that journey where you come in not knowing anything, and after a certain amount of time if you get really engaged, then you get really specific. And I think there's a huge amount for us to learn from the fact that the only real difference between any of these industries is that the adult entertainment industry learn from that data, and it's created new products out of it. Whereas sadly what most industries do is they say 'I've learnt about, how can I turn that into a really annoying ad that I interrupt your TV show with to try and make you buy a product that was exactly the same as it was 20 years ago'. If we use the data to understand what people actually care about, and create products and services that satisfy those wants, needs, and desires we'd be way better positioned to actually succeed as a brand because it would be giving people what they want. And it just seems so weird to me that we don't use it for that, we use it to create rubbish advertising.

Sandra Other than this particular brand, what other brands do you think do this really really well?

Simon In terms of taking data and translating it into value, that’s a really good question, you've put me on the spot there. I think if you look at a brand that's taken people's behaviours and then translated it into value, one of my favourite examples is GoPro. So if you look at the technology industry in general, far too much of the marketing in the tech industry is about specifications and dimensions, and nerdy numbers and stuff that the average person on the street cannot understand. You go to GoPro, you go to their website, you go to their YouTube channel, and it's this really slick video of this guy surfing, or this kid doing crazy tricks on his snowboard, and it's just, it's the content that 20 years ago we would have sat down to watch on MTV.

Sandra The seal that throws the octopus at the anchor.

Simon All these crazy things, and of course my GoPro recorded it and I've uploaded it, and I've tagged it #GoPro, and GoPro have gone 'that's amazing we're going to put that on our website, but by the way we also team up with athletes and celebrities to create professional content'. What they're doing is instead of telling you that there's this amazing camera with all these amazing MPEG whatever blah, here's what you can do with it. So they've seen the content that we want to produce, the stuff that either we've been watching on TV, or the stuff that we've been uploading to our own social channels, and they've gone, 'Yep, here's what it looks like when it's done with an amazing camera that by the way you can strap onto your chest or onto the front of your surfboard, or whatever else it may be'. You just kind of look at that and you go 'Oh wow that's amazing. I want to sit down and watch this'. And the great irony is that most Internet users out there have got an ad blocker of some sort, based on the data, and yet I'll quite happily sit down for three hours when I'm supposed to be working writing a case study, and look at this GoPro content, and get distracted because I'm like 'wow I've got the perfect surf shot when they're going down the barrel and it's just...' Yeah. So I think GoPro, much as it sounds really obvious when I say it. But if you compare what they're doing to all the other people in the industry who're talking about the number of pixels on the camera, and the size of the memory card, I just don't care. If I've seen the content that it produces on your website, that's enough. I'm convinced.

Kai So we just went from porn to whisky to GoPro in the matter of, you know, a few minutes. But the interesting bit here is how companies craft the way in which users interact with them, in which they use their websites, or indeed in which they discover and use their products.

Sandra So we heard a lot about how these companies use data, but I was quite curious to find out how Simon actually translates all these data points that he has, gotten into insights about the future of the future of business.

Kai So indeed we live in a data rich world, and we hear so much about big data and the promises of big data, and presumably the more data we have the more insights we have. But data is a complex business, so it's good to hear from an expert like Simon how he goes about it.

Sandra So how then do you translate all these data points that you have? How do you translate them into insights about the future?

Simon So I'll be honest the way that I use the data that we collect, I have to wait until I've collected it and then I look through it, and most of the time it surprises me. It's a bit like finding gold in the outback, you know you're sort of stumbling along and go 'wow! There's a big nugget of gold right there in front of me'. Now if I know that that's there then I might start digging for more around it. But that is genuinely most of the stuff that we pull out the report. You know I'll get a question from a journalist that says 'tell me how many people are using Facebook in Vietnam'. That's relatively straightforward, I can find that. But discovering that the teenagers were leaving Instagram, for example, I didn't even think to look for it because I just received wisdom, assumed that it was growing. So I think the most important thing that I've learned by collecting this data over nine years and then trying to translate five thousand charts into meaning, is that data never tells you an answer. All it does is it inspires better questions. And I think what's nice is when you go through, and I wouldn't recommend anybody reads the report from cover to cover, even me who produces it, I'd just find that terrifying. But as you sort of look at a few of the different charts, anything that you look at and go 'that does not reflect the reality I see in my day to day life'. That is a perfect question. If the number of messages I get on social media every year saying 'your data's wrong!' And I'm like 'is my data wrong, or is your perception of the world wrong?'. The data is neither wrong or right. The data simply tells you what's happening. Whether you think that that's an increasing or a decreasing trend, whether that tells you about value or not, it's what you do with the data. It's like an ingredient, you've got to do magic before you can turn that into a Michelin star meal. And it's for the marketers and the business people out there to take data and translate it into their specific context. And I think this obsession that we've got in business at the moment with big data, it's like until you do something with that, you're just building mounds of these really valuable ingredients, but nobody's consuming them, because you've not done anything with them.

Sandra And quite often it's not really valuable ingredients either, it's just big, but not good.

Simon Right.

Sandra Bigger is not always better.

Simon Exactly. So big insights, not big data is what we always talk about when we're working with some of our clients, and realistically you can collect 1 percent of the data you've been collecting and get more value from it, if you know what the question you want to answer with that data is. Now admittedly a lot of businesses don't know what the question they're trying to answer is, and therefore in certain instances a greater variety of data gives you a greater variety of opportunities to find new things to investigate. But I think instead of just seeing it as this mass of stuff, you've got to be a little bit more systematic about the way you approach data. Go in with a hypothesis. So one of the things I like doing best is we'll sit down just before we collect all of the data and say 'what are the common stories in the media today that we want to test? What are the received wisdoms and hypotheses that we take for granted about the Internet?'. The kids are going to Instagram being a great example of that. 'What are the things that we think we know, and should we actually check whether or not that's true?' Because an awful lot of the time we sort of nod our heads and go 'yep, yep, yep'. And when you stop and think about you go 'is that really true? Do we use voice? Yes or no'.

Sandra So is there a question you wish you had data on, but do not?

Simon Oh my goodness how long have you got? Right, I'm going to give you my wishlist, shall I? I wish I had far more data about the way Chinese people use their services, so I would love at least basic data on the make up of Webchat’s users. I don't even know what split are male and female, I've got a rough idea whether they're below this age or their age, but it changes all the time. I’d love to be able to track that data in the same way that I do on Facebook, Instagram, Twitter. All the Western platforms I can get that data straight out the advertising tools, but on the Chinese platforms, no. It's close to impossible.

Sandra Do you also think there might be different categories of Chinese data that we might want to collect? If people are using the Internet in different ways, are there different types of data that we wouldn't normally look for in the West?

Simon Yes, so I mean that was the most obvious example, but if I could get richer insight into how people use Mini Programs in WeChat. So for those people who are not familiar with which Mini Programs is the equivalent of the web, but on WeChat. So it's where you can browse content and see companies, and all that kind of stuff. If I could see how people interact with those, and then how quickly they go to a purchase, and then share those purchases with their friends. Yeah, if you could track that level of non-individual behaviour, so aggregated, I don't want personally identifiable information. I just want to understand broadly the way that people use these things, and what kind of value they're looking for. Because I think you've alluded to this already, a lot of the time we exhibit a certain kind of behaviour and we do certain kinds of things not because we specifically wanted to do that activity, but because it's the closest we have to actually getting the value that we want. So I didn't really want to post photos of my lunch. What I wanted was some self-affirmation from my friends that I was living a life that isn't a disaster. So when somebody likes the fact that I'm eating this amazingly sophisticated meal, quite honestly that could have been any kind of content. It could have been a piece of music I created it, it could've been a data chart from my reports. I just want the ego validation that my friends don't think I'm a total failure.

Sandra That's why you do it.

Simon So the reality of the report is I just want some ego validation. Totally. But you look at very cliched models like Maslow's Hierarchy of Needs, which has been bastardized forever. It's a hundred and fifty odd years old, I think. It's still a really good basis for understanding human wants, needs and desires, and then the motivations and the behaviours that come out of that. And you look at something like social media, and it ticks off various different levels in that. So I think if I could understand a little bit about the Chinese way of doing things, I'd be able to step away from my personal prejudices about the way people use Facebook, because of my own personal experience. I use Facebook this way, therefore everybody does. It's very easy to get yourself locked up in that, because this is what I do, that must be the reason why everybody does it. Because I don't use WeChat, because I don't speak Mandarin to a level where I can immediately infer stuff, I have to dig into the data and read it cold, if you like. And that's why I would love that set of data is, in exactly the same way as when we were talking about the adult industry earlier, I can see motivations and actual behaviour without going in there with my preconceived mistakes.

Sandra And what you will find really interesting if you ever do get access to that data is that there are some very interesting studies looking at how Maslow's Hierarchy of Needs is different in a society like China and in the US, where the actual hierarchy the pyramid looks different than in the West.

Simon From a social media perspective this is brilliant isn't it? Because you've got very different perceptions of individual validation versus group validation, and how the dynamics between that work. I know that this is a massive cliché for a white guy to come in and talk about the collective societies of the East. But living in Singapore, spending a lot of time going around Asia, increasingly I have come to appreciate that this is not just one of those sort of catchall statements, there genuinely is this belief that the collective good is better than the individual right. And that's a very Eastern perception, versus something in the West where the individual rights are inalienable. I think that kind of stuff, when you look at motivations and hierarchies of needs and then subsequent behaviours, this is something that marketers need to get their heads around a lot more. Because an awful lot of the decisions being made for global marketing come out of a North American or European mindset, and they don't fully appreciate that, exactly as you said, the hierarchy of needs works differently in different cultures. And we've got to be open to that. The fascinating thing is that we've got access to that data. We can see that. The Internet allows us not only to see the data, but to actually meet these people. We can go and have conversations with them on the Internet.

Sandra But we have to want to.

Simon But that's it. But it's available to us. I find it such a waste of opportunity that there are these opportunities to go out and meet the people day to day, and the management can go and do that instead of having some artificially created focus group. Sorry you've got me on another rant here. So I'll park that. But the opportunities are there if we want to indulge our curiosity.

Sandra Other data you wish you had?

Simon Other data. I would like to have a little bit more insight into why people are doing things like buying cryptocurrency. So we know that globally...

Sandra CryptoKitties?

Simon CryptoKitties? CryptoKit... Yeah, I've not bought a CryptoKitty yet, but bitcoin is similar. I wouldn't personally. I think that that is just a different form of online casino. I'll be very upfront. I think at the moment because you can't do a great deal with bitcoin it's pure speculation. I don't have anything against it, but at the moment it's got no obvious tangible value. But 8 to 10 percent of Internet users around the world claim that they bought a cryptocurrency. Which just blows my mind. We're talking hundreds of millions of people apparently own some form of crypto currency. Now that's great and that's a nice insight, but why? What did you buy it for? Is it so that you can feel that you're technologically advanced? Is it because you think this is a great investment? Is it because you want to buy dodgy stuff on the dark web? What was the motivation behind that? So data basically tracks footprints, but it doesn't necessarily tell you the final destination, or the reason why people embarked on that journey. And I think, you know, it's very nice to look at footsteps, and see where the majority of footsteps are going. But I'm just that weird curious person that wants to stop everybody along the path and go, 'tell me about your journey. What are you doing? Why? Where's the endpoint?'

Sandra So are you looking at any ways to collect more qualitative data? Because most of the data in your report is based on really big data sets.

Simon We collect 150000 individual data points already, I think my business partner might kill me if we started adding in whole new sort of opportunities of new things. I wouldn't really know where to start, if any of your listeners have got tips then I'd be more than happy to enter into a conversation. But I think at the moment I'm very happy with the questions that it inspires. I think, don't get me wrong, I want more data, but with the questions that we've got now I could very easily spend the rest of my career just answering one percent of those and I still wouldn't scratch the surface. So back to your point about at a certain point you need to acknowledge that it's not big data. There's only so much data that you can collect before you just overwhelm yourself with the collection, and you don't do anything beyond that. So let's take the bits that matter most. Well I alluded in the studio conversation earlier to the difference between what we do and whether it adds value, and I think that one of my biggest questions at the moment is where are the areas where perhaps people out in the world feel there are gaps in value in their life, and how can we adapt the Internet to that. Because at the moment is a lot of the case of a big company creates a service we start using it but then we adapt the use of that for our own personal benefit. My favourite examples of this is, there's a farmer in Northern Iran who uses Instagram to sell goats, and he's making a lot of money selling goats to other farmers by showing pictures of here's Debbie the goat, and he sells it on Instagram. It's just brilliant. There's not what Instagram was invented for, and yet commercial reality is in Northern Iran that's happening so you know you've got these companies that build technology for a specific purpose and we adapt. If we knew what the gaps in people's lives are, what are the things that they wish they could do more of, what would make them happier, more successful people, and create services around that. I think that might be a little bit more exciting than the current VC Silicon Valley-centric model.

Sandra So Simon you'll do this again next year. What's your hope for the 2020 report?

Simon You put me on the spot with a question like that. The plan for next year, probably not a huge amount of increase in data but a massive increase in the amount of time we spend analysing and translating the data into meaningful insights. So yeah, hopefully when I come in next time we'll have not only richer data but richer insights to go with it.

Sandra Well thank you for coming in and we'll see you next year.

Simon Thanks for having me.

Sandra And that's all we have time for today. See you soon on The Future...

Kai Next week.

Sandra This week?

Kai Yes, but next week.

Sandra On The Future, This Week. Next week. Thanks for listening.

Kai Thanks for listening.

Outro This was The Future, This Week made possible by the Sydney Business Insights team and members of the Digital Disruption Research Group. And every week right here with us our sound editor Megan Wedge who makes us sound good, and keeps us honest. Our theme music was composed and played live on a set of garden hoses by Linsey Pollak. You can subscribe to this podcast on iTunes, Stitcher, Spotify, YouTube, Soundcloud or wherever you got your podcasts. You can follow us online on Flipboard, Twitter, or sbi.sydney.edu.au. If you have any news that you want us to discuss, please send them to sbi@sydney.edu.au.