David Katz has been in the forefront of applying statistical models and database technology to marketing problems since 1980. He holds a Master’s Degree in Mathematics from the University of California, Berkeley. He is one of the founders of Abacus Direct Marketing and was previously the Director of Database Development for Williams-Sonoma.
Check out the three minute interview on the Predictive Analyticswebsite.
Bill Cullifer: David Katz, Founder and President David Katz Consulting in Oregon. Good morning Mr. Katz and thanks for agreeing to the call.
David Katz: Well, thanks for having me.
Bill Cullifer: Mr. Katz, you are a veteran of the statistical data model and database technology market and I am curious if you could share with the subscribers of this podcast an historical perspective of predictive analytics?
David Katz: Well, sure. You know looking back early days of you know computers in business was all about cost control or cost reduction. You know, people would do applications primarily based upon the idea that they are going to get more work done and use fewer resources too. Over time, with the growth of processing power and storing technology, this… the perspective gradually shifted. You know, the first step was more of a reporting, business reporting; you know getting more information about what is happening in the business and then a further evolution comes in to the idea of predictive analytics or any kind of analytical approach through the database that is developed. So, now the focus is much more on serving the customer better, getting strategic insight, and being able to be agile in the market.
Bill Cullifer: Yeah, great summary and historical perspective. Where are we today in terms of the opportunity in the market? Is this something that enterprise understands completely and very well and are taking advantage of it, is it on the other hand going mainstream?
David Katz: Well, I think people have a lot more awareness than ever before that there is opportunities there. I mean people understand that there are tools and what I see is really a wide disparity from one company to another and from industry to another. Obviously, the people who are involved in Internet technology or engineering, they tend to be much more savvy about the possibilities of predictive analytics. Direct marketers have been really in the forefront of it, but you know there is a lot of areas where they are just waking up to this healthcare and education. You know there is a lot of these industries are just at the point where they need to standardize the information, to make it more available for analysis. So, there is a wide variety of places in different industries and different companies they are at[.
Bill Cullifer: Thanks. I appreciate that perspective. If I were a CEO of a mid sized company today, what would you like me to know about predictive analytics?
David Katz: Well, really you know the heart of it is, you know, most reporting for businesses are for finding purposes. You can only look at a few variables at a time. Predictive analytics really comes into its own when you have you know a volume of data with many interacting factors that are kind of hard to tease out without the right tool. So, you know, you find that a lot of times you have many, many factors that might be associated with the outcomes that you want, but they are all correlated with each other and so you need some expertise and some tools to help you make the most of that data and that’s just kind of a rough introduction, but I think that you know the key thing is when there is more data that you can take in, in some simple report, that’s when you want to start thinking about more sophisticated tools.
Bill Cullifer: Excellent. Well, I certainly appreciate the information and your time today Mr. Katz.
David Katz: Well, it’s been a pleasure. Thank you very much.