CHAPTER 2 Digital Upstarts Vanquished Consumer Giants Flashcards
What percentage of Amazon’s sales are based on personalized recommendations?
As many as half of the sales
This highlights the importance of Amazon’s recommendation algorithms.
What is the purchase graph?
A model created by Amazon that connects people’s purchase histories with their browsing, viewing, and listening data
This graph is used to enhance personalized recommendations.
What are the three factors incorporated by Amazon’s algorithms for product recommendations?
- Diversity
- Serendipity
- Novelty
These factors help in creating effective personalized recommendations.
What is Google’s Shopping Graph?
A dynamic, AI-enhanced model that understands a constantly changing set of products, sellers, brands, reviews, and product information
This model connects users to over thirty-five billion listings.
What does the Knowledge Graph do?
Interconnects interrelated information to uncover comprehensive insights and helps users explore related concepts
It improves the search experience beyond simple data retrieval.
What are systems of record?
Traditionally used systems that gather data on transactions such as who bought what, how much, when, and at what price
They are often maintained separately by departments.
What are systems of engagement?
Platforms that connect with customers through email, websites, mobile apps, and social media
They allow for interaction beyond just transactional data.
What is the significance of product-in-use data?
Allows organizations to track how products are used in real time, leading to better analysis and insights
Companies like Amazon and Google use this data to enhance their datagraphs.
Define datagraphs.
Constructs that capture the relationships, links, and interrelationships between a company and its customers through product-in-use data
Inspired by social networks and graph theory.
What are the three characteristics of a datagraph?
- Scale
- Scope
- Speed
These characteristics determine the value and richness of a datagraph.
How can companies increase the value of their datagraphs?
By expanding scale, scope, and speed of data collection
This can be achieved through partnerships and acquisitions.
What are data network effects?
When users provide data that enhances the value of a product or service for other users
Examples include interactions on platforms like Google and Spotify.
How do data network effects differ from direct network effects?
Data network effects increase value through user engagement, while direct network effects increase value by adding new users
Direct effects are typical in social networking.
What is the role of AI and machine learning in datagraphs?
They are used to analyze data, generate actionable insights, and refine algorithms for personalized recommendations
This capability has developed significantly in the last five years.
What is the relationship between datagraphs and customer satisfaction?
Datagraphs improve customer engagement, satisfaction, and loyalty through personalized experiences
Companies that leverage datagraphs effectively can outperform their competitors.
What is an example of a company that has successfully utilized a datagraph?
LinkedIn, which has developed a professional graph capturing data on around eight hundred million professionals
This graph helps in connecting professionals and enhancing job-related interactions.
What is the impact of digitalization on data collection?
It allows for observable and codifiable actions at scale in real time
This capability enhances the effectiveness of datagraphs.
What do datagraphs capture?
How individuals live, work, play, learn, listen, socialize, watch, transact, travel, spend, and any other activity associated with a business.
How has digitalization impacted the observation of actions?
It has made actions observable and codifiable at scale in real time.
Which platforms does Meta’s portfolio of datagraphs include?
Facebook, Messenger, WhatsApp, Instagram, Oculus, Threads.
What is the description of Facebook’s datagraph?
Social graph.
What allows Meta to run trials and experiments?
Real-time collection of user data on interactions.
How does Facebook determine which posts or ads to show a user?
It sorts through a large inventory and narrows it down based on past patterns.
What type of graph does Airbnb use?
Travel graph.
What does Airbnb track to provide personalized recommendations?
The room each individual rented, the places of interest visited, dining locations, shows watched.
What is Google’s Knowledge Graph used for?
To organize facts and interrelationships about entities.
What does Google’s graph-based architecture help with?
Understanding context in search queries.
Fill in the blank: Google’s Knowledge Graph had indexed more than ______ entities.
500 million.
What does Gen AI enable?
Generating new content in unstructured forms.
What are the three core ideas captured by the letters in GPT?
Generative, pretrained, transformer.
What is a business algorithm?
A proprietary reasoning and inference engine that interlinks various analyses.
What types of analyses do business algorithms link together?
- Descriptive analysis
- Diagnostic analysis
- Predictive analysis
- Prescriptive analysis
What is Netflix’s approach to recommendations?
It customizes its home screen based on detailed user data.
What has Netflix’s recommendation engine saved the company?
Over $1 billion by preventing cancellations.
How does Netflix guide its content development strategy?
By predicting viewer preferences using datagraph insights.
What role does Gen AI play in the evolution of AI?
It generates datagraphs with richer insights and capabilities.
What is the purpose of the shopping graph built by Google?
To provide a Gen AI shopping experience with real-time data on products.
True or False: Google and Microsoft are competing in the search market using Gen AI.
True.
What is the significance of Netflix’s datagraph in content production?
It allows for data-driven decisions rather than relying on gut instinct.
What does the term ‘moment of truth’ refer to for Netflix?
The two-minute window in which a viewer decides whether to watch something.
What are the advantages of a graph-based structure for Google?
It helps understand user queries and improve responses.
What is one of the main challenges for analog companies in data management?
Determining consumer purchasing patterns across different categories.
What is the purpose of summarizing customer reviews?
To provide buyers with a sense of positive and negative feedback without reading all comments.
This helps streamline the decision-making process for potential customers.
What type of tools is Meta creating with Gen AI?
Tools to help advertisers create ads calibrated to appeal to different individuals.
These tools leverage generative AI for more personalized advertising.
Which advertising firm has partnered with Nvidia to enhance customized advertising?
WPP.
This partnership aims to advance the capabilities of tailored advertising solutions.
What partnership is expected to intensify advertising competition with Gen AI?
Google and the Microsoft-Netflix partnership.
This collaboration is anticipated to escalate the advertising wars in the tech industry.
What is Spotify’s AI-powered feature called?
DJ.
This feature acts as a personalized guide that refreshes music lineups based on individual tastes.
How is Airbnb integrating Gen AI into its platform?
By integrating ChatGPT to reinvent the travel experience.
This integration aims to enhance user interactions and travel planning.
What have digital companies used datagraphs and AI for?
To design business models that have displaced many leaders in consumer markets.
This illustrates the transformative impact of data-driven strategies.
What must companies create to compete in a data-driven world?
Distinctive datagraphs and differentiated business algorithms.
This is essential for gaining a competitive edge in the market.
What challenge do industrial companies face from digital companies?
The need to develop strategies to compete with digitals using datagraphs and algorithms.
Industrial companies traditionally rely on proprietary technologies and infrastructure.
What is the focus of the next chapter mentioned in the text?
How industrials can survive and thrive in a digital world by developing industrial datagraphs.
This suggests a strategic approach for traditional industries to adapt to digital disruptions.
