You might also like, Here’s what other people ordered, We think you’ll like this, and last but not least: “Recommended for you!”. They are all highly recognizable phrases to anyone who’s used any internet service or store ever. But how do these recommendations work, why do firms do it and could we go against what’s recommended to us?
How does it work?
In a 2013 interview, Netflix’s Carlos Gomez-Uribe, VP of product innovation and personalization algorithms and Xavier Amatriain, engineering director explained how they are controlling what you watch. They say that the metadata behind their content allows them to find similarities between movies/shows. Next, they track you, everything you do: what you played, what you’ve searched for, how you’re browsing through their services and even when you’re doing this and on what device. At this point they connect you with content that they either outright predict you will enjoy or content that similar users have already indicated they enjoyed.
Why do firms do it?
The answer to this question is fairly obvious and relates to a recent 2014 article by Huang, Zhong and Yao on targeted marketing. The better a firm can analyze and understand their customers and how their products are perceived, the better they can connect the right customer to the right product, thus creating additional value. The customer value resulting from Netflix’s recommendation practices is also well known, not having to spend the time to search for what you want to watch is perceived as pretty valuable by customers. A recent article on Forbes.com they concluded a price increase for Netflix would actually result in significantly higher profits.
Can we go against the recommendations?
Short answer: Yes, but doing so will take more and more effort as time progresses. As Netflix improves their processes, they will understand your preferences even faster while also making their suggestions more automatic, thus alleviating even more of the manual actions you would otherwise have to undertake. So in the extreme event that your personal preferences make a full 180 degree turn, you will have to put in more effort than ever before to change the input Netflix has aggregated on you. Which I assure you will take considerably more time than just changing the TV channel.
Wired.com, Netflix Algorithm, as approached on October 5th 2014, http://www.wired.com/2013/08/qq_netflix-algorithm/
Forbes.com, The impact of Netflix’s price rise, as approached on October 6th 2014,http://www.forbes.com/sites/greatspeculations/2014/05/15/the-impact-of-netflixs-price-rise/
Huang, J., Zhong, N., Yao, Y., 2014, A Unified Framework of Targeted Marketing using Customer Preferences, Computational Intelligence, Vol. 30-3 p. 451-472
New and innovative IT technologies have made it possible to live a more efficient life with lots of new opportunities. However, there are now so many choices that it has become next to impossible to figure out what’s actually really helpful to you. That’s why the transition to that efficient new life is going a lot slower than it should.
An example: Imagine that you’ve got this idea for a great new business! You’re really excited about it and a few of your good friends are willing to help! But to make it a reality you need funding! So you’re thinking: “I know a lot of people believe in my idea, perhaps I can use one of those new crowd funding platforms?” Well let’s see what shows up on a Google search: Kickstarter, Indiegogo, Crowdfunder, RocketHub, Crowdrise, Somolend, appbackr, AngelList, Invested.in, Quirky, GoFundMe, Razoo, PledgeMusic, Sellaband, Teespring, YouCaring.com, Causes, Giveforward, Kiva, FundRazr, HoneyFund, FirstGiving, crowdtilt, Fundable, FundAnything, Patreon or maybe Fundly? That’s a lot of options! Maybe it’s better to limit yourself to Dutch platforms since you believe that’s were you have the most backers? Google says: Geldvoorelkaar.nl, Crowdaboutnow, Symbid, WeKomenErWel, Leadfunder, Kapitaal Op Maat, Fundyd, The Dutch Deal, Viviad, Geldoverenweer, Share2Start, or maybe Seeds is something for you? You decide it’s all too much and realize it’s easier just to borrow some extra cash from DUO.
I think you catch the drift, the choice is overwhelming. Choice is not a bad thing, far from it. But too much choice is. We as consumers have never had this problem before. Choice was limited to what was physically near you. With the internet that’s different now. And the above example is only one of many. Perhaps you’ve wanted to find a faster way to take notes, quickly sell your old stuff or maybe book a cheap holiday? In all these examples you’d most likely google for a solution and be overwhelmed with the options that you’re faced with.
How are we then dealing with this right now? We look for top 10 lists, ask on social media for recommendations or just go with the first hit on Google and keep our fingers crossed. But if I want to upgrade all aspects of my life, should I go through dozens of recommended lists, keep bugging my friends for their experiences or just go with whatever pops up first for everything I’m looking for? Doesn’t sound very appealing… And thus I still physically go to the supermarket even though I can probably get it send to me at home, I still call for a taxi, I still write down what I’ve spent this month… I still go with the tried and true methods that I’ve always used. Not really the new and efficient life that I know is out there!
How about you? Have you figured out how to live your life more efficiently, are you asking your iPhone what movies are on or are you also still taking notes on paper?
Oh! and for those actually looking for a good crowd funding platform, look at the top 10 list on http://www.crowdfunding.com 😉