Beware of the giraffes in your data

Marketers and analysts are always on the lookout for exciting new insights which can translate into action items and provide strategic advantage, but they often miss them. They can even make the wrong decisions – because they fail to account for the “giraffe effect” in their data.
Giraffes are what I call portions of data which dominate the rest of the data – and hide important insights. Sometimes they even lead to wrong conclusions. For example a gaming company client looking for the highest value customers thought the data said it should market to men, when women spent twice as much as those with a Y chromosome. How could the data lie?
The truth is, it didn’t. The company was just distracted by a giraffe.

The giraffe, the fox, the cat and the mouse

Let’s say you’re out watching animals in a nature reserve. Undoubtedly, when you spot a majestic giraffe in your binoculars, you’re going to take a good look at him. Meanwhile, many of the other, smaller animals will all just seem, well, small. You won’t notice that there are significant differences in height among the smaller animals, especially as compared to the giraffe.
allgiraffe
However, if you can take your eyes off the giraffe for a minute and zoom your binoculars into the smaller animals on the plain, an amazing thing happens: you become aware that the differences in size between the animals are actually much larger than you had first realized.
smallerthings
This is a very simple example of the giraffe effect. When people look at a set of data which includes some very large, dominant members, important differences among the other data in the set often disappear from view.

By Pini Yakuel
Source and more:
http://gigaom.com/2013/08/24/beware-of-the-giraffes-in-your-data/


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