How Brands Miss the Boat on Data

Ed Cotton is director of strategy for BSSP, where he leads brand strategy development efforts for the company. He also operates the popular influxinsights.com blog. Cotton spoke with Digiday about how major brands are missing opportunities to harness the power of more readily accessible consumer data.

What are brands missing when it comes to optimizing their use of consumer data?
We now have more data than ever about customers, about their behaviors, and we still operate with a “command and control” attitude. It’s like “the data is ours, even if it is about you and we’re going to use it against you, to more effectively target and market products to you. It’s been used as a more traditional, almost military lexicon that’s been used to create more precise targeting, and I don’t think we’ve really thought of data as a way that consumers might learn more about themselves, about their own behaviors and about the behaviors of others. If you look at these Web 3.0 companies, they are much more cognitive. You can look at a website like OK Cupid, and they are sort of obsessed with sharing data on their users, with sharing how these users perform in a dating environment with the overall goal of educating and informing them. Or you look at sites like Pandora, where they have masses of information on musical tastes and consumer behaviors and they share that as well. We haven’t really looked at the ways that brands might collect and share data about a customer in a way that’s designed to be used for the customer’s benefit and not just for the benefit of the client company itself.
How do brands begin to look at data as a consumer-engagement tool, rather than just a way to more precisely target ads?
So this idea is really turning everything on its head, and it entails creating what I call a “data order.” It requires a brand asking several questions such as: what type of data are we collecting? What belongs to us? What is being collected by a third party? What are we not legally allowed to share, and what other data might we collect, and how might it be useful for our consumers and also aid in the brand-consumer relationship? I think, ultimately — and everyone else talks about this as well — that brands are now trying to be useful to people. It’s easy to be useful to people if you make a piece of hardware or you make software because it has its own inherent promise. But if you are a classic packaged goods company and you make margarine or spaghetti sauce, you might not have really thought about being useful to people above and beyond providing the product. You would probably end up with a one-dimensional view of the world, which is what can happen if you are a product marketer. You think, “I’ve got to get my message out there, that my sauce has more mushrooms than anyone else.” But that’s not really enhancing anyone’s life, it’s not being useful to anyone. I think brands should think about what their overall goal is and then reference that to make the data that they have more useful to the consumer. A really good example of this is Unilever. The company, in its marketing strategy for a brand of washing powder, decided that its identity really wasn’t about washing clothes and making them whiter. It was about the broader emotional benefit of feeling free to let children leave the house to go out and play without worrying about their clothes getting ruined. It became about bringing a useful dimension to the brand. Then there are questions about when and where do children normally go out and play. How do they most often play? Once you’ve discovered what your brand’s vision is and your brand’s higher purpose is, then you can connect that with the question of  ”What kind of useful data can I provide to the consumer?”; and you can always create and identify data opportunities to help define that purpose. I think this adds a broader dimension to the brand-consumer relationship, and it becomes much richer as a result. It goes towards brands providing much more than just detergent for the consumer. Providing that what is provided is truly useful and relevant.
Why is looking at data this way such a rarity?
I think it’s just based on the history of the way data has been collected. The prime sources of data have been grocery market scanning systems, things like zip codes, geo-demographic analysis and customer databases. Other sources have been customer loyalty programs and other companies that haven’t really looked at or handled data properly, and the model hasn’t really evolved in the last 40 years. Maybe it has become a little more sophisticated, but not very. And now we are suddenly in the world of connected devices and in the world of scalability. You’ve suddenly got potentially so many more opportunities to correct the way data is used, instead of companies just collecting behavioral data around where people go on the web. You are starting to see companies use data differently, like Kraft with some of their successful recipe apps. They suddenly have this incredibly rich layer of data around how people are using the app, what recipes they like, how long they spend reading the recipe. They can also start appending survey questions into the app to learn even more. This is a new layer of data that before apps, brands might not even have thought about because they wouldn’t have had access to it. I think that the rise of the connected device and the rise of applications has considerably changed the way data is used. We are getting incredibly more sophisticated about how we visualize, analyze and use this kind of rich data. It’s a huge phenomenon that people are still grappling with. You look at services like Mint, which is ahead of its time in aggregating spending data — I mean why couldn’t a bank have done that? To add to what I said earlier, it might just be a matter of a psychological shift in terms of why data use hasn’t evolved. Brands may be saying, “It’s my data and I don’t want to share it with you. What are (consumers) going to do with it? It might be dangerous if it gets into the wrong hands, customers might use it against us,” or something along those lines. I think we will see more and more examples of brands thinking more and more about this and coming up with really interesting ways of collecting, displaying and using data.
While last-click attribution still reigns, can brands evolve to a broader view of online data that doesn’t necessarily translate into banner clicks?
Banners are certainly easier to measure, but I’m sure that Nike has a metric for Nike+, for example, which allows it to connect the success of that platform to sales in some way. But It requires a certain type of creative person who can sell this idea and fill in the blanks. Once we see a few of these (projects like Nike +), everyone will want to do it. It requires a great deal of technical ability and creativity to enable consumers to interact with data in meaningful ways. I think there are two steps: deciding what data to share with consumers, and then finding ways to create interactive tools that allow consumers to connect with that data.
So what is engagement in a data-driven era?
If you decide to allow consumers to engage with a magazine app on their iPads, and you say that a certain amount of content will be free, then we can move engagement times from seconds to minutes. It creates a new level of potential. It’s all possible now. As much creativity that is required to bring data to life in online advertising. We are sort of in a hybrid model now. We have the offline world of TV and publishing, and then we have the online world in an awkward mash-up, and it isn’t quite right. For example, we know that online video is being used for advertising now more than ever. We know that it is technologically possible to show a 30-second spot online, but that’s not necessarily the optimal mode of communication. We now have the technological ability to create better content that can raise levels of engagement, provided that we can be creative enough and create models that are interactive enough. The offline world’s weakness is that it has thought about engagement in the passive sense. It’s been “sit back and watch my great ad.” It hasn’t really thought about saying “lean forward and interact with us.” That’s where it is going to get really interesting.