Can Personyze unlock big data for small businesses?

You’ve probably noticed the increasing amount of talk about “big data” — the ability to analyze, manage and use vast tracts of data — in the last few months. Tim O’Reilly’s been saying that this is a crucial area of development for years, using the slogan that “data is the ‘Intel Inside’”, and for years, we have been watching closely too.

It’s all great news if you’re a big, data-heavy startup or huge company with thousands of engineers. But what does big data really mean to most businesses on the web? Anyone who runs a website knows that there’s a vast amount of information being collected — but the fact is that there are remarkably few ways to really use it. Step in Personyze, an Israeli startup that wants to help people turn all that data into a recipe for action.

The company, based in Tel Aviv, is today announcing an integration with San Francisco’s Rapleaf, a controversial company that collects and trades data from the Web. Rapleaf’s methods have come in for plenty of criticism in the past, but Personyze says the agreement between the two companies will bring new data into its systems without compromising privacy.

How does it work? Personyze originally started with an add-on to Google Analytics, but it quickly developed its own standalone analytics product. That’s because it realized it wanted to build something a little different; a suite of tools that first lets website owners analyze a vast range of data about their users — and then, crucially, gives them a way to deliver them customized pages based on whichever segments they choose to focus on.

“With this segmentation engine, you can separate visitors off depending on different variables,” founder Yakov Shabat told me. Those variables include “Geography, keywords, what site they came from, whether they’ve visited before. We can take behavioral information, we can take social information like age or number of friends from Facebook, we can take third-party integration.”

What he means is that if you have a particular group of users who have a particular requirement — say, you discover that late-night visitors from America who come via Twitter tend to want to buy specific goods — you can make sure they see the most appropriate material. And there’s no complex development required: just find the right assets to point them towards, drop a little Javascript onto your pages and it’s done. Suddenly, the next time somebody fitting the bill drops by, they’ll see something personalized to them.

It’s something Shabat admits is still new to a lot of companies. “We’re have to do a bit of market education,” he admits. “But a lot of people do understand the segments they have… they just don’t know how to define them.”

He suggests that using Personyze means users spend more time spent on your site, and that time is more enjoyable because it’s personalized. It allows site owners to serve better ads more easily, which leads to better sales and greater clickthrough rates. And to prove that this isn’t just a pile of magic beans, the company says it’s already got revenue coming in from its customers: mainly small- and medium-sized companies, but a few big ones too — e-commerce customers, gaming sites, and (says Shabat) it is also currently being evaluated by some news websites, too. The result of all of this is that the business isn’t looking for funding.

Instead, it’s striking out with deals, including its one with Rapleaf. That will put the issue of data protection under the microscope, especially since Rapleaf’s practices have been exposed on several occasions: here by Om, in the Wall Street Journal and elsewhere.

Personyze says it’s avoiding those pitfalls by protecting user privacy — the data it collects from one website stays within that website alone, and is not shared across many services. But it adds that the deal will let customers pipe much more basic information into the system, allowing them to start with a much richer base of data.

Will personalization be a big business? I’m not sure, but it’s possible. It’s certainly already making great waves in ad networks, tracking and behavioral targeting — despite the privacy concerns. But if Personyze is going to unlock an entirely new world for smaller web companies, then it needs to focus on being fast, easy and user-friendly, and right now even with these tools, personalization isn’t labor-free.

However, the larger point holds true: if big data is truly going to become a big idea, then people will need ways to turn information into something they can really use… and the mainstream tools out there right now don’t necessarily do that job properly.

“I think Google Analytics is a fantastic tool,” admits Shabat. “But it doesn’t give you the way to change what happens.”