THE ALGORITHM ECONOMY JAMES (JT) TURNER @jamesturner247

HELLO, WE’RE BLACK SWAN

We help our clients work out what

will be important tomorrow….

We build algorithms that predict

consumer behaviour and software

to enable automation.

ONLY WITH THE RIGHT CONTEXT CAN WE MAKE

ACCURATE PREDICTIONS.

[Black Swan] n. common expression in 16th century

London as a statement of impossibility.

[Origin] from the belief that all swans were white, before

the first sighting of Australian black swans.

BY 2018, OVER HALF OF LARGE ORGANIZATIONS GLOBALLY WILL COMPETE

USING ADVANCED ANALYTICS AND PROPRIETARY ALGORITHMS, CAUSING THE

DISRUPTION OF ENTIRE INDUSTRIES. GARTNER 2016

CONUSMER BRANDS AND RETAIL BUSINESSES HAVE ALWAYS BEEN IN THE BUSINESS OF PREDICTION AND INFLUENCING BEHAVIOUR…

UNDERSTANDING PREDICTING INFLUENCING

BRAND

AWARENESS

SURVEY

DRINK

MORE MILK SALES FORECAST

JUST “LISTENING” IS NOT ENOUGH.

HOWEVER, WE NOW LIVE IN AN ALGORITHM ECONOMY…

More data than ever before,

algorithms, and real-time

automation are challenging

traditional marketing processes

The Internet is now the world’s

largest source of consumer insight.

Just listening however, is not

enough.

Traditional organisational structures create silos which make effective use of algorithms difficult.

SUCCESSFUL DEPLOYMENT OF BIG DATA REMAINS A SIGNIFICANT CHALLENGE

Many businesses are failing to

operationalise benefit from big

data, particularly data from outside

their own organisations.

AND CONSUMER BRANDS FACE EVER INCREASING PRESSURE

LOW GROWTH MARKETS &

DOWNWARD PRICE PESSURE

SHARE LOSS TO

INNOVATIVE START UPS

MEDIA

FRAGMENTATION

Never before has the need to

anticipate consumer preferences,

habits and shopping behaviour

been so important

WE WORK FOR SOME OF THE WORLD’S BIGGEST BRANDS TO HELP SOLVE THIS CHALLENGE

• 9 OFFICES WORLDWIDE

• OVER 260 PEOPLE

WE HELP OUR CLIENTS WORK OUT WHAT IS IMPORTANT TOMORROW

We combine cutting edge data

science, software development and

industry expertise to accurately

predict trends in consumer

behavior in order to gain

competitive advantage through

more effective brand activation.

WE IDENTIFY & EVALUATE

DIFFERENCE

Connected consumer output

across multiple channels

WE START WITH DATA

LONG TERM TRENDS

SHORT TERM TRIGGERS

AND CREATE ALGORITHMS

AND SOFTWARE

CASE STUDIES USING TRIGGERS AND TRENDS TO APPLY PREDICITON

THE CHALLENGE

Creating successful new product

innovation is expensive and has a

high failure rate in FMCG

THE OPPORTUNITY

Is there such a thing as a new

idea? With the huge mass of

consumer opinion now available on

line, surely it’s just a case of finding

the right one?

THE RESULTS

Predicting success from over

30 MILLION CONVERSATIONS

NEW PRODUCT DEVELOPMENT CREATING SMARTER INNOVATION

WHAT HAPPENS

A

B B

C

A B

Predicting success

30 million conversations

Results

The conversation

Idea generation

Segmentation

Trend audit

EVENT PREDICTION FOR SUPPLY OPTIMISATION

Store data

WHAT HAPPENS

Promotions data Weather &

environmental data

Daily supply forecast

10% THE RESULT

MORE ACCURATE

THAN MITSUI’S

EXISTING MODEL

Forest regression

model.

THE CHALLENGE

Mitsui’s Retail System Service

business supplies thousands of

7-11 stores across Japan. Black

Swan was challenged to build a

predictive supply chain model which

was more accurate than Mitsui’s

existing approach.

THE SOLUTION

Ssales, promotions and store data

were unified with external weather

and environmental data and

modelled using a customised

random forest regression model.

HYPER LOCAL MEDIA ACTIVATION PREDICTING COLD & FLU ALLERGIES

THE CHALLENGE

Deliver increased relevancy and

greater media efficiency through

targeted digital media.

THE SOLUTION

A dynamic algorithm designed to

drive media & retail activation.

PUBLIC

• Weather

• Social conversation

• Search behaviour

• Government Statistics

PRIVATE

• Store level Sales data

Predicted high risk areas for the

spread of cold and flu at zip

code level 4 days ahead of any

local authority advice.

Direct integration with digital

media ad platforms (Google

DFA, Facebook) for hyper local

targeting & content

optimization

Local prediction used by sales

rep to increase in-store

visibility.

DATA MODEL

INPUTS

ALGORITHM

OUTPUT

AUTOMATION &

APPLICATION

12% SALES UPLIFT

LOCATION

TARGETED MEDIA TO

9M CONSUMERS

THE RESULTS

500,000+ consumers engaged with

the flu tracker application

Geo-targeted media reached

9,000,000 consumers.

200% uplift on benchmark CTR

12% uplift in sales

HYPER LOCAL MEDIA ACTIVATION PREDICTING COLD & FLU ALLERGIES

THANK YOU