When we think of mass communication, we tend to think of entertainment media like television sit-coms and movies, or news media like newspapers and the evening newscast. However there’s another form of mass communication that might be less visible but is becoming increasingly important in both economic and social terms. Information, when it’s compiled and sold on a large scale, is seen as a form of mass communication by many scholars, including Joseph Turow.
Compiling and selling information a relatively raw form is very big business. Occasionally, the information is sold to regular people. However, more often the customers are companies or organizations. Some of the most obvious examples include Arbitron and Nielsen (the radio and TV ratings companies, respectively). They compile and sell information about who watches or listens to what. This information is sold to other companies, primarily advertisers and the media outlets themselves. Market research companies and organizations that compile and sell syndicated research, like GfK MRI are other examples. They sell detailed information about potential customers to companies that have something to sell.
Two recent news stories provide other examples of companies that make at least part of their business through selling information.
One of them is a new company called Relationship Science. According to Andrew Ross Sorkin of The New York Times, what this company has done is build up a large database, culled from public, online sources, of information about who knows who and how in business world. Sorkin describes how the system works:
Let’s say a banker wants to get in touch with Mr. Kravis, the private equity deal maker, but doesn’t know him personally. The banker can type Mr. Kravis’s name into a Relationship Science search bar, and the system will scan personal contacts for people the banker knows who also know Mr. Kravis, or perhaps secondary or tertiary connections. The system shows how the searcher is connected — perhaps a friend, or a friend of a friend, is on a charitable board — and also grades the quality of those connections by identifying them as “strong,” “average” or “weak.” . . . The major innovation is that, unlike Facebook or LinkedIn, it doesn’t matter if people have signed up for the service. Many business leaders aren’t on Facebook or LinkedIn, but Relationship Science doesn’t rely on user-generated content. It just scrapes the Web.
Apparently, there are many people who are extremely excited about his. Sorkin reports that when the co-founder of the Home Depot saw the system in action, “he nearly fell off his chair” and “used an unprintable four-letter word.” The reason is that, for people in certain financial circles, this kind of information can give them a leg-up on networking. And networking is everything, as indicated by the subscription price to access the system – $3,000 a year. That number nearly made me fall off my chair. However, according to the company founder, “If you get one extra deal, the price is irrelevant.”
A second example comes from another Times story, this one a feature on GoodReads, which is a social networking site focused on book recommendations. Late in the story, the author, Leslie Kaufman, describes how the site makes its revenue. One source of income is selling “sophisticated data mining to marketers.” The site can provide data about who is interested in which books very quickly by keeping track of who is putting which books in their virtual “to read” piles, which indicates they want to read something. According to one of the marketing directors that Kaufman quotes, this type of “real-time feedback in sales trends is the kind of data publishers dream of.” The article describes an example of how a small publisher, Open Road, used this information to sell books. The company had a new series that was targeted to a very specific group of readers. They were able to able to place ads on the site for people who were in online book groups dedicated to that specific sub-genre. When someone who was registered on the site put the book in their online “to read” pile, indicating that they were interested in reading it, the company could offer them a discount.
Knowledge may be power, but information can be revenue.
