Direct & Integrated Marketing Roundtable

Wednesday, June 25, 2014

Embrace the disruption, don't fight it!

I bet you are feeling the disruption due to technology advances either in your personal life or workplace?  Am I correct?  And I bet you are feeling overwhelmed at times by these disruptions?  Yes?  Trying to stay on top of the latest computer advances, technologies, medias, communication vehicles, apps, mobile devices, advances in tracking software, and online security issues is not easy to say the least.

Well, don't feel alone.

We are all feeling the impact here.  But here is the deal...embrace these disruptions and adapt and become stronger as a result or as a business you will be out on the streets.  These advances are not likely to slow down any time soon, guaranteed.

Two months ago I was invited to speak on the uses of social media and digital technologies at an AGTA (Airport Ground Transportation Association) conference being held in Clearwater Florida.  And, I was honored to have been asked.

Listening to the 3 keynote speakers prior me going on stage, I heard fear and anger from the AGTA about Lyft and Uber who are infringing on cab and livery drivers turf at airports, hotels, and about town.  I heard them talk about the poor quality of the Uber driver and how they are not licensed, or insured in some cases, or have criminal records.  They went on for over an hour.  I felt hatred, anger, confusion and many emotions pouring out of them that morning during the keynote.  But you know what, I get it.  They are being disrupted by technology.  Just the latest victim due to technological advances.  I totally get it.  But talking badly about Uber or Lyft is not going to make it all go away.  The consumer has spoken.  And they love the ability to open an app, click and have a car at their door.  And, in this day and age of social media, the consumer is in complete control.  The tables have turned.  So, when I got up to start my talk I told them not to feel alone.  I told them they are not the only ones feeling the pains and sense of confusion.  We all are, even us academics like myself.  Yes, even academics.

In case you did not realize we academics are undergoing a major disruption in the University setting.  MAJOR!  In academia we are being disrupted by what we call MOOCS - Massive Open Online Courses.  Courses that are being offered online for free and in some cases full semester courses.  Khan Academy and Coursera are just two such web sites offering these courses from universities like Rutgers and Harvard.  Many universities like mine do not know what to do.  The way we deliver content to students is changing and changing quickly and if we do not adapt we will have no students to teach.   It is that simple.  I cannot tell you how many committees I am on right now dealing with this issue.  But you know what, I love it.  I, like many of my peers, are embracing the challenge and trying to figure out how we can make education more affordable, convenient and a better overall experience for the students all due to technological advances.

Brands too have and are feeling the pain.  Because of social media, they have lost the ability to simply push out a message and expect us consumers to passively accept that message as fact.  Now us consumers have the control.  We can tell our friends what we think of the brand, their products and the type of customer support (good or poor) we receive.  Brands have totally had to change the way they interact with us consumers as a result of social media all caused by advances in mobile technology.  And, those brands that do not understand this simple fact, well, will be left out in the cold.

But two of the the biggest disruptions I can think of were (1) Naspter and (2) travel agencies.

Napster, although what they were doing was illegal, totally changed the way music was purchased and delivered and consumed.  Probably one of the largest disruptions out there due to advances in technology. 

And what about the once vibrant travel agency business model.  Remember them?  Or maybe you don't.  In this case it was the adoption of the Internet alone that changed that business model and killed off travel agencies (except for those dealing with exotic vacations).  Apps or mobile had nothing to do with this feat.  Travelocity, Kayak and others killed the travel agency businesses.  Wow, not that is a disruption.

So Mr Cab Driver we are all being disrupted.  You are not alone.  You (and all of us) have two choices.  Either site back and fight it and lose or, embrace all that technology can bring and use it to our full advantage to build even a better business model.  The later will be more fun and give much better odd of success.  Guaranteed.

I would love to hear your thoughts.

Perry D. Drake
   Assistant Professor of Social and Digital Media Marketing, University of Missouri - St. Louis

Saturday, June 21, 2014

A Statistician's View on the IRS Investigation

If you have been following the congressional investigations on the IRS practices, you may have heard that seven individuals who are under investigation, all had hard drive failures on or about the same time.  In addition to that, the IRS further claimed all failures resulted in an inability to retrieve any data from each of the seven drives.  Here is a link to the Miami Herald from June 20, 2014 on the hearings in case you have been vacationing on a remote island the past week:  http://hrld.us/1lIktol.

Photo Source:  C-SPAN 

As a seasoned statistician and data analyst, I thought to myself, what are the odds?  Is this very likely?  Maybe it is.  After all, we live in a digital world and who among us hasn’t had a hard drive crash, or had a close friend who had a hard drive crash?  So I decided to do some investigation to determine just how long the odds were of seven hard drives failing, and following that, the probability that of all seven, no data can be salvaged.

As any statistician knows, this is a straightforward calculation.  It simply requires some data, a few assumptions and a calculator that can multiply.

Data Required
1.  What is the failure rate of any hard drive?   Hard drives do tend to fail more when they are older and in addition various manufacturers have different failure rates.  I found an article on Lifehacker providing some good information comparing some major manufacturers.  (reference:  http://lifehacker.com/the-most-and-least-reliable-hard-drive-brands-1505797966).

They also provided some normative failure rates across all drives.  (reference: http://lifehacker.com/how-long-your-hard-drive-is-likely-to-last-1462918832)  In particular, the last article says that if you consider a hard drive’s life in three segments, the probability of a failure in year 1 is 5.1%.  Past year 1, but before 3 years, the failure rate drops to 1.4%.  After three years the failure rate is 11.8%. 

2.  What is the probability of retrieving information on a crashed hard drive?   In looking into the various causes of hard drive failure, there are many things that can render a hard drive inoperable without damaging the disk itself.  If the disk itself is in tact, the data should be retrievable by strategies that include (1) taking the disk from the inoperable drive and swapping it into a drive that works or (2) taking a transient voltage suppressor (TVS) diode off of the circuit board causing the hard drive to come back to life long enough for one to copy files to a fully functional disk drive.  Joel Hruska wrote an excellent piece on these and other techniques, "Raising the dead:  Can a normal person repair a damaged hard drive?" (reference: http://www.extremetech.com/computing/133294-raising-the-dead-can-a-regular-person-repair-a-damaged-hard-drive 

What cannot be repaired is actual damage to the disk itself.  So in investigating the success rates of companies that do this sort of thing (and provide success rate metrics on their website), I found a company in Grand Rapids, Michigan called Data Recover that gives a success rate on data recovery at 95%.  I also found a German Company called Freecom which gives a success rate on data recovery at 98%.

We will assume the crashes of the seven hard drives are independent.  Meaning that in an office setting, the event of a co-worker's hard drive crashing has nothing to do with the probability that your own workstation will experience a hard drive crash.  This is a relatively safe assumption.

Additionally, we will assume the ability to retrieve the information from one drive has nothing to do with the ability to retrieve data from another drive.  Again I think a safe assumption assuming we make a good effort to retrieve data on each damaged hard drive.

The Equation 
Assuming independence of events, the equation to compute the probability of seven hard drive failures is the probability of a failure on the first computer, multiplied by the probability of a failure on the second computer...and so on until the seventh computer.  If we assume the odds of any one hard drive crashing being equal to 11.8%, then the odds of seven hard drives crashing at the office would be 11.8% to the 7th power:

(0.118)**7 = 0.0000003185473901 
or converting it to odds
1 in 3,139,250

If we further factor in the probability of not being able to retrieve data on any of the seven hard drives we would need to include the 5% probability for each computer that the data would be irretrievable.  To do this we simply multiply the above figure by 0.05 to the 7th power:

0.0000003185473901 x (.05)**7 = 0.0000000000000002488651485 
or converting it to odds
1 in 4,018,240,425,000,000

To put this in perspective, the odds of an individual being hit by a meteorite has been calculated by NASA to be 1 in 20,000,000,000,000 (reference: http://www.theguardian.com/commentisfree/2011/oct/13/meteorite-space-earth).  And the odds you will win a Powerball Lottery is 1 in 175,223,510 (that is why most statistician never play the lottery by the way!)

What do you think?  Could it be true?  Would love to hear your thoughts and if you agreed with my assumptions. #lovestatistics #bigdata #numbercruncher 

Rhonda Knehans-Drake 
   Assistant Professor, New York University & CEO, Drake Direct