From Brexit to Trump: How digital has changed the world and how it will change your business.

This is a seminar presentation by David Coghlan, Head of Marketing for FSB Business Profiling recorded at the 2017 FSB National conference in Torquay.

Watch the full video below or notes and images from the presentation are below

There is no denying that the world is digital.
Science daily Source: Science daily

We create 2.5 quintillion bytes of data every day.

The data that powers the digital world is growing. In fact, this statement has actually been true for the last 30 years.

As technology advances we have created more and more data so, every two years we create 10x as much data. For almost as long as I’ve been alive we’ve been riding an exponential growth curve and it doesn’t look like it’s going to slow down anytime soon.

The challenge remains that this data is created while we’re just doing what we do, living our lives, visiting websites, uploading things to social media, talking to Alexa or Siri.

How we behave as a modern society has changed as our lives become more entwined with technology and yet the data about us as individuals and as business owners exist in different places, so you don’t necessarily see everything that is available and more importantly what is being accessed and by whom.

So what does ‘big data’ look like in the real world, how is it being used?
Brexit poll of polls Source: Bloomberg

This is a trace of the Brexit poll stats from 1st September 2015 when the referendum question was set until the eventual referendum date on June 23rd.

This is made up of 100s of individual polls run by all the major poll organisations and a mix of telephone, in person etc.

This is interesting because throughout the entire campaign while the gap got narrower, apart from towards the end, data from the polls put the remain vote very much in front.

Even Farage conceded defeat as polls closed on the 23rd June. All indications from the polls, the mainstream media even the two sets of campaigns suggested that remain would win.

Of course, we know what happened. But why did this happen and why was everyone so shocked?

I’m not going to comment on the social or political changes that the UK is going through at the moment as those are the fundamental reasons that the UK populace voted as it did.

What is interesting is how the Brexit campaign won and what behaviour we saw from the UK public particularly in terms of where they consumed information and how they formed opinions.

UK brexit voter map Source: BBC

Fundamentally the polls were wrong. Relying on asking people outside polling stations or telephone interviews is a flawed mechanism and wasn’t accurately representative of the mood of the nation during the campaign.

Behavioural information is far more precise.

What people do, click, like and share online is fundamentally a more accurate insight into what people actually think.

The EU referendum was truly fought online with both campaigns utilising complex digital data and marketing campaigns to identify and score voters based on significant volumes of social media, behavioural and other consumer data sources.

Although excluded from the Leave campaign, UKIP, Nigel Farage and Leave.EU played a significant role in the quest for Brexit.

While generally ignored by the mainstream media, which tended to focus on the Conservative ‘blue-on-blue’ attacks and debates, UKIP contracted Facebook to distribute speeches by Farage, plus campaign video footage – such clips were watched by millions of people.

In theory, the remain campaign had the greater marketing and resource might but in the end, the critical difference and the reason the leave campaign won, was the better use of data and the targeting they employed to deliver their message.

Trump demonstrated an even more extreme example of targeted use of digital data during the US presidential election.

Whatever your view of Donald Trump, his election campaign and the approach of his digital director Brad Pascale was genius. Labelled as ‘amateurish and comically bad’ at the start of the campaign, the more cost effective and agile digital approach literally came up Trumps.

Rather than relying on the usual scatter-gun approach to campaigning with on the ground teams knocking on doors, blanket flyering and TV advertising, the Trump campaign used data to target and influence only the voters most likely to vote Trump. Not only that but they only advertised in the areas with a narrow majority in order to maximise his opportunity of getting the minimum 270 electoral votes.

Presidential candidate pageviews Source: Parse.ly

Helping Trumps below the line digital marketing activity was the sheer volume of press coverage he got throughout the campaign. This is the volume of page views for articles about each of the presidential candidates during the campaign.

It just demonstrates the obsession that the media and we had with Trump. He is the personification of the term ‘no such thing as bad PR’.

This free media coverage has been estimated at a total value of $5 billion dollars to the Trump campaign and while the coverage was certainly not all good what the consumption of these articles fed was the massive swathes of behavioural data becoming available to the Trump campaign allowing him to reinforce his core messages with those people most likely to engage with him and also to discount people who demonstrated behaviour that suggested they would vote for Clinton.

The polarising nature of his personality and comments actually helped his digital more readily identify his core supporters and also closet supporters who could be persuaded to vote via digital targeting

The other key thing of note is that not only was Trump considered an underdog because of who he is or his political experience but also because of his relatively low financial might.

Presidential candidate pageviews Source: Fortune

In total, the Trump campaign raised only 60% of the Clinton campaign $340m vs. $590m. So from day 1, his strategy had to be leaner and focused.

It’s worth noting that after fundraising donations and Super PACS contributions the Clinton campaign in total raised $1.4Bn vs. $957m raised in total by Trump.

Becoming president isn’t cheap.

The mix of channel focus is highlighted right up to the end, in the last few days of the campaign when both candidates were in the Get Out the Vote phase, basically frantically knocking on doors, calling from field offices and blasting adverts out across TV, Trump spend almost double what Clinton did on Digital advertising.

The Trump campaigners also had an app which logged the on the ground door knocking activity in real time and which was linked to their central database. It meant they could knock on the doors of people who either hadn’t been reached by other Trump media campaigns or who were still sitting on the fence and needed an extra nudge to get them to lean towards Trump.

In contrast, the Democrats were scribbling which houses they’d knocked on, on little bits of paper and then waiting for that to be manually uploaded to their own database.

Just like Brexit, no one saw this result coming.

PaddyPower even paid out E1m on the 8th November ahead of the result being announced, so sure were they of the result going in Clinton’s favour. When the bookies get things wrong you know it’s a shock.

These two massive seismic shifts in our political world are the product of disaffection but they have been enabled by technology.

The old way of doing things and measuring things no longer work. It’s a digital revolution and the people are back in control of what they see, what they read, what they believe and the decisions they make.

So if this is our new reality what does it mean for us as business owners and how do we adjust to take advantage of it.

Charles Darwin quote Source: Darwin project

Great opportunity to trot out this famous quote, widely attributed to Darwin but actually originates from a management studies text.

The key thing for us as business owners is use data to help us make the right decision more often.

We’ve seen some frankly pretty crazy things happening recently, Brexit and Trump were merely the products, the disaffection with the status quo provided the environment but digital data was the enabler that allowed these changes to happen.

We know that cost is no longer a barrier so why can’t your business deliver the same level of seismic change in your market?

The digital revolution is here and it’s an enabler to unprecedented change not just for politicians but for every business owner that is willing to embrace it.

Let’s take a look at some examples to demonstrate what I mean.

Animoto Source: Animoto

This is Animoto an online app that allows you to create awesome videos using your phone including various editing tools etc. You get all this on either a monthly or annual subscription and prices start from £7.99. This is their website they’ve been featured on various high profile sites like the BBC, Forbes, Inc. New York Times etc. all very nice.

FSB Business Profiling website report Source: FSB Business Profiling

We analysed Animoto using our tool FSB Business Profiling, and their website scored really well as you might expect, they’re doing all the right stuff from an SEO perspective, they’re using HTTPS, they’re mobile responsive and our tool estimates they’re getting about 1.5m visits a month, mostly from search or referrals. So far so good.

Animoto social media channels Source: Facebook & Twitter

Given video is now such a huge part of social media, these guys are doing a great job across their social channels with 73.5k twitter followers, and 134k Facebook fans.

Interestingly however, social only accounts for 3.5% of their website traffic so while these guys are doing a great job of reaching people and engaging them across their social channels it’s a good indication that these audiences are happier consuming information about Animoto where they happen to come across it i.e. Facebook or Twitter rather than being handed off to the website.

This goes against the original mechanism of the digital sales funnel with the goal being to hand people off and collect data from them.

Social channels like Facebook, Instagram and Twitter are also businesses and are desperate to keep users within their walled gardens so are rewarding publishers/ businesses like us with extra reach when we utilise their native tools e.g. Facebook video etc. rather than embedding YouTube videos.

FSB Business Profiling social report Source: FSB Business Profiling

When we analysed their social channels as expected they’re doing well. Engagement could be better i.e. creating content that your audience likes, comments on or shares particularly for a video business they should be able to do this but engagement is a challenge for everyone regardless of size or scale.

For a company with such a large audience, it doesn’t take long to find some less than perfect information about the product from actual users, something which is quite obviously missing from the website in retrospect.

Animoto Trustpilot Source: Trustpilot

Animoto has over 100 reviews on Trustpilot with an average rating of just 2.8. a quarter of their reviews are 1 or 2 stars but what makes this even worse is that they are not involved in this conversation either because they don’t know about it which is a real risk for businesses today, or because they’re just willfully ignoring it.

The majority of the reviews are related to pricing and payment structure with people feeling frustrated with the unclear annual payment plan and feeling so unhappy with any resolution from the company that they rant on third party website like this.

FSB Business Profiling feedback report Source: FSB Business Profiling

When we analysed their feedback report the results were as expected.

My main issue here is that the issues the users are reporting are not with the product but more the mechanism of payment. Some clarification on the pricing screen or toggling the default payment option to monthly would resolve these issues.

My assumption can only be that the financial payoff of defaulting everyone to annual payment is worth some reputational risk and the admin and overhead of issuing refunds. Whatever Animoto’s reason for not dealing with this its negative info that is available to anyone and it creates a reason not to buy.

Tapeonline.com Source: Tapeonline

This is Tapeonline they sell VHS tapes, disk drives, memory cards, hard drives etc. and like their product, their website doesn’t seem to have moved on much since they launched in 2001.

FSB Business Profiling website report Source: FSB Business Profiling

Appearances can be deceptive, though, when we analysed this website there are some obvious things they could do better, particularly mobile optimisation, UI, UX and obviously design.

However this business has been around for years, they utilise SSL, have a tonne of backlinks and get over 80% of their 10k monthly visits from search. This is evidence that if you know your audience, stick to what you know, in this case clearly SEO then it’s possible to have what I suspect is a low input relatively recurrent revenue stream from your business.

Tapeonline social channels Source: Facebook & Twitter

Having managed a number of client social channels I can relate to this. They have social channels namely Facebook and Twitter but the audience size is pretty low they haven’t posted anything for some time and it all feels like a bit of a mish-mash.

To be fair I can’t imagine anyone here frantically logging into Twitter or Facebook to talk to a business that sells blank tapes, minidiscs and memory cards.

FSB Business Profiling social report Source: FSB Business Profiling

To be fair to Tapeonline, they aren’t that far behind our average score for all FSB Business Profiling users, so I’m sure that the story here might resonate with a few of you.

My view here is pretty much the same as the guys at Tapeonline they’ve decided that actually what they sell is probably not best suited to engaging and lively social interaction so they have in effect abandoned their social channels to the tumbleweeds. This is a perfectly reasonable strategy and aligns with their business model, they don’t need social.

And here is why.

Tapeonline Trustpilot Source: Trustpilot

Tapeonline are absolutely nailing their customer feedback strategy. Their website is basically a list of different products and people saying how awesome they are. That’s it.

This mechanism negates their need for social media, any queries are dealt with promptly and effectively, they have systemised their entire order, packing and delivery mechanism, which when you are operating very much in a ‘Laggard’ market is absolutely critical.

These guys have been doing this for so long there is literally nothing to go wrong and they are rinsing every little piece of value out of every customer.

FSB Business Profiling feedback report Source: FSB Business Profiling

When we analysed it they came back with one of the highest feedback scores we’d ever seen. The only reason we could mark them down was due to a lack of response to feedback but given pretty much everything is positive it’s not really an issue.

Data discovery

So we’ve seen a couple of examples there of businesses that have discoverable data available about them, we’ve only looked at the very top level numbers that impact each of those areas and also only at a couple of different platforms but you can see how information about your business is available to your audience and the decision making process can happen very much at arms length from your business.

The first step for you as business owners is understanding what’s out there about your business.

When you know what’s available you can start to make decisions about how that potentially impacts your business.

Not everything will be critical as we saw with Tapeonline, there is no point expending time and effort with social media when you are focused on operational efficiency but unless you have assessed and discounted that then you’re still just guessing.

But digital data is not just about marketing and making sales. Data can be used to understand pretty much anything and make decisions about anyone.

Banks have been using data about us and our businesses for decades now to make decisions about whether or not we can have loans, credit cards, bank accounts or whether we need some sort of payment protection.

The downstream impact of our marketing and sales efforts are supposed to turn into cash, revenue and profit which again gets turned back into data and used for analysis and assessment. And not just by these bankers, but by your suppliers, business partners, investors and anyone else who has an interest in the financial status of your business.

Credit reference agencies have been compiling ‘big data’ since before it was ‘big data’ and they remain the main conduit through which almost all financial decisions are made.

FSB Business Profiling credit and finance reports Source: FSB Business Profiling

We can’t share any insight on other businesses credit and financial performance as the nature of some of the information is confidential, however, I can show you a summary of our own financial and credit scores.

As a privately funded and relatively new business our financial score is pretty low, but as we saw with our other examples we know why this is and what we can do over time to improve.

Our background is Fintech, consumer and commercial credit so it would be quite embarrassing to have a low credit score.

Aside from that, it’s also important for us as a B2B business to be able to present our business in as positive a light as possible as we have lots of relationships with large technology businesses who have strict credit control and assessment criteria. In order for us to be able to work with best in class partners and suppliers, it’s critical for us to be able to demonstrate that we are a low credit risk business.

You may be looking at this and thinking yawn, this doesn’t relate to me I’ll worry about my credit rating when I need money.

However one of our predictions, and as we saw earlier with Trump, is that in the near future different data sets are going to start getting added into the risk models for banks, lenders and anyone else wanting a view of a business. Social or review data, in particular, is being looked at as a more effective real-time predictor of business failure because it reflects the current experience of a business rather than relying on the longer financial reporting cycle.

So, to sum it all up.

Summary

The revolution is here. But it's an enabler and as business owners, we can deliver massive change in our own markets.

The key is to firstly know what exists about your business and once you know that use it to adapt, improve and ultimately grow.