Big Data, Stupid Decisions / Strata Jumpstart 2011 / Panos Ipeirotis
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Transcript of Big Data, Stupid Decisions / Strata Jumpstart 2011 / Panos Ipeirotis
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Big DataStupid Decisions
The Importance Of Measuring What We Should Be Measuring
Panos @IpeirotisStern School of Business, New York University
“A Computer Scientist in a Business School”http://behind-the-enemy-lines.com
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Shopping for a camera
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Multiple merchants sell the same camera
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Consumers do not always buy the cheapest
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Willoughby’s enjoys a 7.5% price premium (= $140)
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Price Premium Percentages, Amazon.comTransaction price compared to competition
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Num
ber o
f Tra
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+100%-100% 0% +30%
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Customers care about reputation!
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The price of Willoughby’s reputation(*): $140
(*) vs 17th street photo
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What is reputation?
Factors affecting pricing power
Number of stars Number of past transactions …
Text!
My reputation, Iago, my reputation!
-Shakespeare, Othello
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How text affects reputation?
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The value of text
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The value of text
Misspellings…
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good packaging -0.56%Positive? Negative?
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Recommendation Letters:“He is a good student”
“He works hard”
Decision: Reject
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AAA++++ seller -2.93%Positive? Negative?
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People interpret things differently, according to the context
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Lesson #1
Adapt to the environment
One size does not fit all!
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Same idea, different focus:How reviews (text) affect product sales?
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Best camera! -0.20%Positive? Negative?
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Tell me something specific, you shill!
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Positive Negative??
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“If this is the worst that can happen…”
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What product features do customers want?
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Point-and-Shoot: Lenses, zoom, …
Zoom Lenses Megapixel Battery Life
% Discussion
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Point-and-Shoot: Lenses, zoom, …
Zoom Lenses Megapixel Battery Life
% DiscussionEffect on Sales
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Lesson #2
Not sufficient to know what people say
Measure what people DO
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Reviews, Grammar, and Hotel Bookings
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Bad Grammar → Bad Sales
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Zappos takes action!
Examined and fixed grammar for millions of reviews on Zappos.com!
Used Amazon Mechanical Turk, paying ~$0.10 per review
Improved product sales!
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But… is it ethical?
“Would you correct a friend’s tweet or Facebook post? …Nitpick a colleague for using shorthand in emails sent from his iPhone? …This level of social intrusion is almost unthinkable.”
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Experiment: Fixed 1000 reviews
Emailed authors: “Do you approve of the changes?” Gift card for replying
Result: 978 replies, not a single negative evaluation!
“Thank you! I almost feel that I am ‘stoopid’ when I leave such reviews!”
“Hey, the review is not updated online! When will it be fixed?”
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Experiment: Fixed 1000 reviews
Emailed readers: “Do you approve of the changes?” Version 1: Only new version posted Version 2: Disclaimer (“Review has been edited…”) Version 3: Disclaimer + mouseover to see old review
Result: For version 3, unanimously positive replies!
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“Can you do the same for YouTube comments? My eyes hurt every time that I read them”
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Lesson #3
Check your gut instinct at the entrance
Measure and then talk!
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Lessons
1. Measure in context: one size does not fit all
2. Measure what people do, not what they say
3. Measure!
Thank you!