The Butterfly Effect in Web Experience Management

Today’s guest post comes from John Prince, founder and CEO of DreamFire Interactive (http://dreamfireinteractive.com). He has extensive experience in strategy, product management, marketing and sales for internet businesses. DreamFire has delivered its comprehensive internet marketing services and solutions to Fortune 100 brands and is an Oracle partner specializing in the web experience management solution, Oracle WebCenter Sites.

I was recently on a vacation, a much needed and deserved one at that, to Cape Cod to celebrate Independence Day along with friends. I decided to take a bus after considering various options and booked my tickets for a 9:00 AM bus that departed from the Port Authority Bus Terminal in New York City. I had some calls with our India office that were scheduled to end by 8:00 AM. I was impatiently trying to conclude my final call before I could take off, but the call got prolonged by 12 minutes. As a result, I managed to miss the bus to Cape Cod and found myself two and half hours later writing this blog. A seemingly small , 12 minute delay, ended up pushing my departure by two and half hours. But this was not the end of the story. Because of this initial delay I was met with increased traffic and reached the Cape after the sun set . This was not part of my original plan, but no big deal. I was on vacation.

You are just reading one small instance of what is called the Butterfly Effect. The phrase, Butterfly Effect, refers to the idea that a butterfly's wings might create tiny changes in the atmosphere that may ultimately alter the path of a tornado or delay, accelerate, or even prevent the occurrence of a tornado in another location. Sounds crazy, but it is not.

I would like to relate the Butterfly Effect to digital marketing to see how seemingly small things could cause significant effects. For example, let us look at the effects of ‘contextual relevance,’ the concept of delivering the right information, to the right person at the right time, in your digital marketing efforts.

Studies have shown that in the publishing industry, contextual relevance helps improve the average time spent by users by up to 300%. Recommendations can phenomenally improve average revenue per customer on eCommerce sites.

Contextually assembled home pages reduce bounce rates by 60% and improve customer engagement dramatically. Smart phones and tablets with geo-location take contextual relevance to a new dimension. Social media adds a new dimension of relevance to the user.

Real time decisioning can help drive contextual relevance of your online content. When used with Oracle WebCenter Sites, Oracle's Real-Time Decisions (RTD) platform combines both rules and predictive analytics to deliver a contextually relevant web experience to your users.

I have heard business clichés like 'make it rain' and 'think big' in terms of digital marketing. The truth, however, is that we can accomplish remarkable results by applying the Butterfly Effect and initiating small actions setting your initiatives in the right course. But chasing the storm hoping for lightning to strike you is rarely the best use of your money.

Comments:

The problem with the butterflies is that you cannot predict which butterfly causes the storm. It is a metaphor taken from Chaos theory that illustrates the fact that minimal differences in the starting conditions do not lead to similar end results, but to something totally unpredictable.
Your ripple effect would have impressed me if your ended up, say, on Mars, or if you had founded a new religion.
I think it is the attitude that matters. As you cannot tell which butterfly makes the difference you should handle all the butterflies -- each detail with care. All details together might bring you closer to your desired future.

Posted by mprove on August 10, 2012 at 10:20 AM EDT #

we are all interconnected by the slightest movement and degree of separation. The Amazon are our lungs and each of us a brother on the digital highway of life.

Posted by Frank on August 10, 2012 at 03:39 PM EDT #

If chaos theory were to make prediction in complex systems impossible all weathermen and investment bankers would be without jobs rather quickly.

According to Wikipedia, "in chaos theory, the butterfly effect is the sensitive dependence on initial conditions, where a small change at one place in a deterministic nonlinear system can result in large differences to a later state". Note the explicit use of the terms "deterministic" and "nonlinear". This indicates that, although the outcomes may vary wildly based on similar starting conditions, the system is not by definition unpredictable.

In fact, chaos theory assumes that a set of simple rules underly the behaviour of the system. The central idea is that although the rules are simple, the system consists of so many components that is becomes impossible to consider them all when making predictions. Small changes in starting conditions are only small when considered against the whole. When viewed from the perspective of the outcomes, the differences may seem huge. The trick is finding which initial components and conditions have large effects, and which ones do not.

The beauty of Oracle Real-time Decisions (RTD) is that by making as few assumptions as possible about what it is that drives consumer behaviour, but rather by measuring the outcome of different starting conditions, the system can autonomously learn to predict which approaches work best for which consumers. Because it can make these predictions in real-time, we can immediately start using these forecasts to make small changes to the customer experience to improve our chances of a good outcome. This does not mean it will be right all the time, but often enough to result in the huge business benefits our customers see every day (consider for instance 986% ROI: http://www.oracle.com/us/corporate/analystreports/infrastructure/forrester-tei-rtd-432543.pdf).

Meanwhile, the comprehensive built-in reporting can help businesses discover the butterflies in the surrounding storm of behaviour to help direct other related marketing efforts.

I agree that it is the attitude that matters. But in my view we should not be focussed on chasing every butterfly. Test, control, measure and learn to predict which ones are important. It's not easy, but certainly not impossible; and RTD can help you find them.

Posted by Lukas Vermeer on August 11, 2012 at 06:25 AM EDT #

The SCAREY theory states: Think Big, Apply Simplicity, then Make it Rain!

Posted by scarey on August 13, 2012 at 10:04 PM EDT #

Hi Lukas,
the investment bankers have almost made themselves obsolete :)

I suspect that customer experience cannot be changed like coordinates in the complex Mandelbrot area. Furthermore the customer behavior is not deterministic nonlinear. Maybe the average values are, and there is the value and benefit of your algorithms. I would love to read more abstract and mathematical examples on your blog at https://blogs.oracle.com/rtd/
-Matthias

Posted by mprove on August 14, 2012 at 06:37 AM EDT #

It's interesting to take this concise thesis and apply it to the anti-tracking legislation being passed (time-in/time-out) through congress. Speaking of Butterfly Effect, I wonder how much revenue the industry of e-commerce alone would go down and jobs lost if companies would not be able to target contextually relevant information to digital hand-raisers...? Think of the affected brands, cities and industries.

Posted by Nobez on August 15, 2012 at 11:42 PM EDT #

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Oracle WebCenter is the center of engagement for business—powering exceptional experiences for customers, partners, and employees. It connects people, process, and information with the most complete portfolio of portal, Web experience management, content, imaging and collaboration technologies.

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