This weeks blog focuses on Data Mining, explaining what it is, who uses it and why it is used.
What is data mining?
Essentially data mining is the process of breaking down data and summarising it into useful information. This infomation is used by companies to increase revenue or lower costs. Data mining software takes data from a variety of sources and looks for patterns between elements of data. It then summarises any correlations into relevant information that can be utilised to their advantage . This process is most useful to companies with a consumer focus usually in industries like retail, communications and general marketing but can easily be utilised by other industries alike.
How does this work?
Data mining is just the analytical procedure of data analysis. Generally the vast amounts of data used comes from data collection within the company but data can be bought and sold between companies. The companies that collect the data have a tendency to care very little about the content of the data they collect with a policy that the more they can gather the better. Once this information is collected it becomes part of a systematic review of your habits and patterns. This data can be extremely valuable to other companies undergoing product or market research.
Companies use the infomation gained from data mining to try to predict what an individual is most likely to purchase from them for example a retail brand would use data mining to discover trends in previous purchases by the customer to give them an idea of what they are most likely to purchase next. From this Data the company could increase their sales by advertising products that correlate with the information. This would usually done through email based memberships.
Should you be worried?
Data mining can be harmless in its simplest form for example customer research done by a company to get the deals and products that you would potentially enjoy isn’t necessarily a bad thing it might lead to you purchasing a product or experience that without data mining you might not of known about. In this instance both the company and the consumer gain something from the process. Ultimately small-scale data mining is nothing to be worried about, if you keep in mind that when online shopping using YouTube or Netflix or even searching on Google predictions are being made about you. The problem doesn’t lie in the use of data mining itself it lies in the risks in personal security of everyday web and mobile communications due to large-scale data collection and storage.
Leave a Reply