Marketing, customer satisfaction and loyalty

Satisfied customers will follow you everywhere

Opaque 3rd-party algorithms : a business opportunity

Share This Post On

For some businesses algorithms have become instrumental to their strategy as a whole and their marketing strategy in particular. These algorithms are a well-kept secret and businesses have emerged that sell their knowledge on the inner working of those algorithms.

PageRank and SEO agencies

Look at Google for instance. Their search engine (which is in fact a very sophisticated recommendation system) is constantly evolving, affecting millions of websites around the world. SEO agencies have specialized into optimizing their clients’ websites to be better ranked by Google’s algorithm.
Another example is Facebook, whose algorithm decides on the visibility of a post in users’ feeds. Specialized agencies try to find strategies to obtain more views or more engagement (crossposting is one such technique that leads to much experimenting since it was launched in 2016).

The Linkedin algorithm

At a lesser scale, this phenomenon also affects other platforms which make use of recommendation algorithms.
Linkedin for instance has undergone massive, yet discrete, changes since its takeover by Microsoft. Their algorithm determines the visibility of a post in your connections’ timelines. Experiments have shown that publishing updates containing images and hyperlinks led to less visibility. Linkedin consultants concluded that Linkedin’s algorithm was penalizing updates with those characteristics which led to the development of strategies to circumvent those problems.

The AirBnB algorithm

Another less known example is GuestReady, a French startup that helps AirBnB hosts better manage their property to maximize their financial return. Their business model is to take care of the property to make the owner’s life easier (maintenance of the property, handing the keys over, cleaning before the next guest arrives) but also to help the owner gets a better visibility on the platform. That’s the claim made by Bertrand Desis, GuestReady’s co-founder, in an interview to the French journal “La Tribune” where he explained that their knowledge of AirBnb’s algorithm allows them to boost a listing’s visibility on AirBnb’s website. The variables influencing a listing’s visibility on AirBnB, he explains, are :

  • the frequency of price changes
  • pictures
  • response time

Conclusion 

Algorithms have become a central piece of many companies’ strategies. For some those algorithms are even the central piece of technology that creates the very value of the company (what would Google be without its recommendation system?). Because those algorithms remain opaque, other businesses have developed around trying to understand how they work. It’s not reverse engineering (no one knows the code and is able to reverse engineer it). Rather it’s empirical knowledge building, trying to understand from an algorithm’s response what its inner working mechanisms look like.

Tags: , ,

Author: Pierre-Nicolas Schwab

Pierre-Nicolas est Docteur en Marketing et dirige l'agence d'études de marché IntoTheMinds. Ses domaines de prédilection sont le BigData l'e-commerce, le commerce de proximité, l'HoReCa et la logistique. Il est également chercheur en marketing à l'Université Libre de Bruxelles et sert de coach et formateur à plusieurs organisations et institutions publiques. Il peut être contacté par email, Linkedin ou par téléphone (+32 486 42 79 42)

Share This Post On

Submit a Comment

Your email address will not be published. Required fields are marked *