Grist for afterthought as well

Liberated from Harvard Business Online:

Forethought Grist

If You Love Your Information, Set It Free

by David Weinberger

More and more customers would rather go to Web sites that aggregate product information than to the individual company pages that generate and present the raw data. That’s because aggregating information often adds value to it—especially when one type is mashed up with another, such as it is at real estate sites where crime data are mapped along with house listings or at travel sites that post each flight’s on-time record. But aggregation presents a quandary for senior executives who believe what pundits and consultants have been telling them for decades: Information is a vital organizational asset that must be tightly controlled.

Companies are often surprised to find that they benefit from having their information pooled. Setting data free broadens a firm’s presence in the marketplace and lowers the cost of providing information to users. It also gives customers a better experience (travel sites, for example, compete on the basis of how easy they make it for customers to reach a good decision) and allows a company to focus on its core competencies. Meanwhile, the aggregators drive business back to the source companies.

So in most cases, companies shouldn’t resist aggregation. In fact, they should make it easy for aggregators to scoop up and disseminate their information. The airlines, for instance, provide their schedule data for free to travel sites. The real estate industry, by contrast, has fought aggregation, despite the benefits to the field. Propsmart, a real estate site, collects property listings through a cumbersome process known as “scraping.” Software analyzes publicly available real estate Web sites and tries to figure out which part of the text is a zip code, which is a price, and which is a phone number. Even though Propsmart’s listings provide free marketing of available properties and send customers back to the originating agents, Propsmart regularly battles cease and desist orders from real estate companies.

In the long run, resistance to aggregators is futile. Somewhere, undoubtedly, a couple of kids are sitting in a dorm room figuring out how to aggregate and disseminate your firm’s data. Executives should therefore make sure that aggregation works to the advantage of their company, their customers, and the firm’s other stakeholders.

The key is to understand that metadata—information about information—drives aggregation. Think of the label that indicates to a doctor that the 40 on the patient’s chart is her age, not her pulse rate or her IQ. Metadata lets search engines sort by relevancy, allowing, for instance, dating sites to bring the right couples together. Companies can facilitate the aggregation process by providing the appropriate metadata and by doing so in a standard—or at least predictable—format. You wouldn’t want an aggregation site to mistake your product’s serial number for its price.

Even if the information is represented accurately, however, aggregation can have a downside. When products are listed side by side with other companies’ offerings, the competitive differentiators simply may not show up (the aggregator may display the prices but not, for example, customers’ satisfaction with product support). Eventually, aggregated data will become far richer, because the aggregators will respond to competition by offering all the relevant differentiators.

Of course, if a company has already achieved genuine dominance in its industry, it can put up technical and even legal barriers to aggregators precisely so it won’t have to enter into the competitive fray. Such tactics may work, but they will ultimately stifle the market and be a disservice to customers.

Reprint: F0706A
Give Feedback