I keep hearing the phrase Big Data. Whether it be conferences, blog posts, or due diligence requests from VCs about different startups, it’s probably one of the most used phrases in 2012. The chart below shows “Big Data” search volume in Google over the past 4 years. ‘Nough said.
The phrase Big Data, in my humble opinion is missing a word: Applied.
Big Data means two things to me.
#1: Capturing and structuring the voluminous amount of data that gets exhausted across digital channels. Includes clouds, servers and infrastructure.
#2: The application of whatever is in the database to make meaning. The application of this data to make better decisions, or at least more informed decisions. This is generally software based.
I’m using Big Data to make roster changes to my fantasy football teams. I’m using it to optimize billions of impressions that are in month on behalf of clients. I’m using it to understand my DNA. More and more people are using it as well in order to make many types of decisions. The more digital we become as a society, we should be able to make better decisions.
While much of our days are battling agency against agency for our next client relationship that brings revenue growth, whom we’ve been competing with over the decades is changing. When David Ogilvy wrote his famous book, I bet he wasn’t envisioning who was going to be his next competitor. It’s no longer just JWT vs. Ogilvy or kbs+p vs. Arnold. It’s also Madison Avenue (encompassing many of our agencies) vs. IBM vs. Adobe vs. EMC vs. etc. You get the idea.
Today’s announcement with Adobe is powerful and did not come out of left field. Back in March, I blogged about why I’m long on ADBE.
IBM + Adobe + EMC combined have a $266 billion combined market cap.
MDC + Publicis + IPG + WPP + Omnicom have a combined $44.1 billion market cap.
One could certainly argue about multiples and valuation of stocks (tech vs. services) but you get the idea – there is material market cap differentials between the two cohorts.
Over the next decade, as Madison Avenue grows a digital backbone and big tech expands it’s marketing services, our world is going to collide. I’ve seen both sides in their current form today and there are pockets of brilliance but there is a really long way to go. I have to assume that the M&A landscape on both sides of the table here are going to be fascinating and corporate development folks are going to be busy.
Note: It’s not a winner take all game here. Many partnerships are going to be found between these businesses, however, at what point does cooperation turn into competition? (I like competition)