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Two Lessons for Brand Marketers from SXSWi: Data Paralysis and the Emerging Open Interest Graph

Since the late-90s when SXSW’s multimedia portion was redubbed ‘SXSW Interactive’, the little ‘i’ has evolved to encompass a lot. Once a sandbox for start-ups and small developers, SXSWi is now a launch pad for brands, services, and platforms of every shape, size, and industry. It has become so large that marketers argue over the value of participating as if it was a Super Bowl ad.

With this growth, many wonder whether SXSWi has lost its scrappy charm. “It’s too big!” some cry. “It’s overly commercial!” others wail. While this claim is fair, it has become one of the world’s largest Petri dishes for innovation, technology, and media, which is valuable in itself. The event a fascinating porthole into the digital space and a microcosm of the swift pace of change. For instance, in 2010 Gowalla topped Foursquare for a SXSW Web Award in a major geosocial showdown. These days, the latter is the de facto LBS partnering with Amex and the former is probably the secret ingredient in a BBQ joint’s dry rub.

Other than cursing the day you dismissed slapping your logo on an umbrella, here are two big lessons for brands from this year’s SXSWi:

Dodge Data Paralysis

In the mid-20th Century, marketers treated consumers as largely homogenous because it was difficult and costly to do otherwise. This lack of information paralyzed some brands and resulted in messages that lacked relevance for large percentages of audiences, creating waste and aggravating consumers.

In 2012, we have a glut of consumer information – census data, social actions, user journeys, clickpaths, and, with the advent of social media, interests and likes. However, it doesn’t stop there. In the panel ‘Influence: It’s in Your Genes’, Paul Saarinen and Scott Fahrenkrug discussed how the next data frontier may tap a customer’s very core: genotyping through DNA.

In the past, much of a consumer’s behavior outside of a purchase environment was only for anthropologists to understand. Now dashboards are at our fingertips and we can often observe what consumers are actually saying via social media. While this shift was manageable in the 70s through the 90s, access to information has accelerated so quickly because of social media, mobile, and other emerging platforms, many marketers are struggling to turn this data into meaningful insight.

Introduce the idea of complex sets of data like DNA and, suddenly, we’re paralyzed by a surplus of data.

Takeaway: Decide what consumer information is important to your brand by focusing on your business objectives.  Just because something can be measured doesn’t mean it will result in insight about your consumer or your business.

Data comes from your website, social platforms, SMS lists, direct surveys, secondary research, and your own intuition. Good marketers will decide which metrics are most important to their businesses. Building a dashboard without strategic context is worse than ineffective – it risks wasting valuable resources and confusing the issues. Focus is key – determine what you need to know as a part of your strategic planning, and stick to that information and re-evaluate periodically. Strive to be as disciplined with your data diet as you are with your strategy.

Play in the Interest Graph

Unsurprisingly, Pinterest and its kin received plenty of attention at SXSWi – and panelists in the ‘How to Harvest Consumer Intent from the Social Web’ session touched on the distinction of these platforms as parts of the ‘interest graph’ not the ‘social graph.’ While it may sound like a mincing of buzzwords, it’s not – there’s a fundamental difference in the role brands play within the two graphs. In basic terms, here is a handy definition adapted from David Rogers at ReadWriteWeb:

  1. Social graph (n): “This is who I know.” E.g., Facebook, BranchOut, LinkedIn.
  2. Interest graph (n): “This is what I like.” E.g., Pinterest, Fancy, Netflix.

Certain platforms and services straddle this line, like Foursquare , YouTube, and SXSWi belle of the ball Highlight.

Of #1 and #2, where would consumers expect to interact with consumer brands? Clearly #2, the interest graph. The interest graph, often focused around products and visuals, is a much more natural milieu for brands. This type of activity existed in closed platforms for years in the form of Amazon Wish Lists and gift registries, but the open interest graph is a relatively new territory for marketers. As panelists, Edward Boches, Farrah Bostic, AJ Vaynerchuck, and Jeff Janer agreed, part of understanding the climate around your brand in digital is understanding emerging platforms.

Social relationships are central to a platform like Facebook, while brands are ancillary – remember last year’s Forrestor Research study that suggested large chunks of 12-24-year-olds don’t want to befriend brands on The Social Network? Conversely, brands and the lifestyles they represent are regularly central to user activity on Pinterest.

Takeaway: Embracing the concept of an open interest graph as distinct from social media at large could be a large boon for certain brands. Ripe opportunities exist for developing a brand’s visual voice and segmenting based on interest where the primary social activity is representing one’s tastes through tangible items, often products.

Did you attend SXSWi? If so, what are your big takeaways? Other than invest in branded umbrellas.

 *Image credit: South by Southwest® (SXSW®) Conferences & Festivals.