Data Driven 2019 was all about the increasingly innovative ways we are using data and showcasing companies that are leading the way. Whether you work in the entertainment industry, air travel, or sports, there are probably better ways to incorporate data into your business strategy then what you are currently doing. Below is a quote taken from this years opening speaker, Holly St. Clair, who touched on the importance of data in today’s digital world.
“Data is only as good as your ability to use it. And, I often find that we’re ingesting all this data, and we don’t really know what to do with it, or really, rather, our business leaders and decision makers, can’t quite figure out how to connect that to the mission, or to properly interrogate the data, to get the information they want.”
We watched two general sessions at Data Driven 2019; one with film production company WarnerMedia and another with fantasy sports provider DraftKings. Here are three modern data trends that are spreading across all industries:
When creating a movie, production companies have multiple basic questions to answer; which screenplay to choose? Who to cast? How will the result be perceived by audiences? These questions are starting to be answered in revolutionary ways using data. In the general session with WarnerMedia’s President of Applied Analytics, Matthew Marolda, he used the example of the Godzilla franchise, which was produced jointly with Legendary Entertainment. Projects focusing on a known property such as Godzilla are a lower risk because they are already well established in pop culture. However there are still questions of whether or not those properties are culturally relevant enough to succeed in a modern setting. There is also a question of which actors to cast in order to maximize success. WarnerMedia uses data to gauge what is creating the most buzz online; which properties are still referenced and talked about and which actors are most popular at the moment.
DraftKings is constantly collecting data on all of their 14 sports. With this they are able to accurately predict the best dollar entry price and amount of prize money for each contest. These predictions are based off of previous similar events as well as the other events that are occurring at the same time. If these predictions end up being inaccurate, the result would be a loss of profit. This is because entry into the contest concludes following the start of the game, so these decisions can only be predicted. So for example, if the NBA finals are happening on the same day as a regular season MLB game, DraftKings might decide to make the pool size of the MLB game smaller as most people might divert their funds to bet on the NBA finals.
As previously mentioned, properties that have not been previously established in pop culture are riskier releases. In these scenarios, production companies must evaluate the quality of ideas in a different way. For example, The Meg (2018) was a new concept in the well-known shark genre. Warner knew audiences were less likely to take a shark-themed film seriously, so they made the trailer lighthearted instead of the usual intensity given to shark movies. Audiences responded well to the self awareness; an analysis that was made by looking at data from digital platforms.
Another way production companies can test audience reactions is through test screenings. Traditionally, this is done with a full theater and the audience is given a survey afterwards. However, this method is flawed because a full theater is not the typical atmosphere the average person will watch the film, and the opportunity to participate in a test screening could make the audience feel special and therefore have a biased response. Production companies are addressing this by using technology to analyze individual physiological responses; what parts they laughed or cried at, when their heart rate spikes, etc. These one-tenth of a second measurements allow production companies to see how the audience is actually responding to the film.
Operating a business that involves any form of gambling has some level of risk. Part of DraftKings success comes from how they use data to reduce this risk as much as possible. One of the best examples of how they do this is by using data to determine what the starting bet of a particular sport or game is e.g. historically golf fans have higher incomes on average compared to fans of other sports, so they tend to bet greater amounts. So it is safe to say then that DraftKings can set the starting bet for a golf tournament at a higher value compared to other sports without increasing the risk of not enough fans entering the pool.
After the film itself is made, production companies must find the most efficient way to market and distribute the movie, which involves finding the market. For example, WarnerMedia used social media signals and determined the huge potential of the Chinese market and opened an office there. Their challenges include the constantly changing social landscape (what is acceptable and what is not) and the scarcity of movie tickets. Films are typically re-edited for a Chinese release in order to comply with cultural standards. To address ticket scarcity, they turn to the Chinese cultural tendency of purchasing movie tickets in advance and making sure it is easy to do that, as well as making sure more become available later.
In terms of finding markets for new properties, production companies have made a habit of deconstructing successful properties into their bare essentials in order to recreate that success in a way that is still original. This goes beyond usual characteristics such as genre. For example, the Harry Potter franchise was popular among young adults and was a film inspired by the popular book series. Later films with similar characteristics include The Hunger Games and Twilight. The success of Harry Potter meant that The Hunger Games and Twilight were determined to be better bets.
In order for DraftKings to expand internationally, they must be careful about where these offerings are because different sports have varying popularity internationally. For example, American football is most popular in the USA and Canada, but is secondary compared to professional soccer in Europe. Another example is looking into sports that are popular in other countries but are not popular in the USA. Australian rules football is one of the country’s largest sports markets and is a great opportunity for DraftKings to expand into Australia.
The introduction of new data trends requires rethinking department roles and the qualities a company looks for in employees. WarnerMedia approaches data science with three equally sized teams. The first team is scientists; they typically have a PhD background, are more academic, and research-minded. The second team is software developers; they have to deal with the large amounts of data and are focused on finding solutions. The third team is marketing analysts; they deploy the first two teams’ work into marketing campaigns. When they’re finding new talent, they focus on internships and growing their own talent. This is because as a film production company, it’s competitive enough that they have a high retention rate as they all want to work in the film industry. But while they want their employees to be passionate about films, they focus on people who show curiosity, creativity, and solutions-based thinking skills.
DraftKings has revolutionized the sports betting industry, because of this they have had to look for the right balance between employees that have a passion for sports as well as a passion for data. It can not be one or the other. This derives from the fact that all three of the founders were data scientists and DraftKings considers themselves a data driven company. Guest speaker Greg Karamitis, SVP of Fantasy Sports, spoke on his previous experience working for Capital One. Capital One is a “hyper-analytical” company that he thought split risk better than anyone else in their extremely competitive market. Since that was very similar to what DraftKings wanted to do, he brought their philosophies and practices over with him when he was hired.
These two sessions showed us how in two different industries companies are all becoming data driven companies. This speaks to how even in the most unexpected industries, data is going to play a huge role in shaping any company’s success from now on.
How do you see data being used to make strategic decisions in your company?