Monday, September 15, 2008

Information Arbitrage

Arbitrage has been a widely used term in the financial world, describing the practice of taking advantages of price differences in different markets. It is all about striking a combination of matching deals that capitalize upon the imbalance.

Today’s marketing universe has its own arbitrage phenomena that lately has been written about more often, for example Bill Tancer mentions it in his book “Click”. I am suggesting calling this phenomena “Information arbitrage”. Information arbitrage is occurring when a marketer takes advantages for his own brand over other brands due to one of three potential arbitrage situations: More Information, Better understood Information, Better used Information. It is all about capitalizing on an imbalance related to the availability and usage of data.

More Information refers the pure fact that one marketer might had more information than the rest of the category. Better understood information refers to a marketer’s situation when his analytical horsepower and intellectual capital is just better than the rest of the industry and allows him to uncover previously hidden insights. Better used information refers to the fact when a marketer allows the whole brand organization to have easy and meaningful access to information that allows for more and better insights driven decisions than the rest of the category.

Information arbitrage can be one of today’s most critical competitive advantages for any marketer.

2 Comments:

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