Data providers are next on Pernod Ricard’s hit list to uncover which companies are secretly profiting from its budgets.
As easy as it is for an advertiser like Pernod Ricard to show third-party cookies often aren’t accurate, it’s proven harder to determine how that inaccuracy translates into wasted budget. What’s changed — and the reason why almost two-thirds (62 percent) of brands have made uncovering data arbitrage and the markups made on their data a priority in 2018 — is that advertisers are tightening up their contracts. If an advertiser doesn’t have contracts in place that guarantee transparency, it won’t know the fee added on to data segments as they are passed down the chain.
“Can I say with 100 percent guarantee that the [the third-party data] we use for our lookalike targeting is the way it should be? No, but we’re moving in the right direction,” said Conor McQuaid, evp of global business development at Pernod Ricard. McQuaid said it was inevitable the transparency spotlight would move to the costs and quality of data after Pernod Ricard gained greater clarity on how much of its budget contributes to effective advertising.
Now, Pernod Ricard is pursuing what McQuaid calls a “test and learn” approach to weeding out the unreliable third-party data it is buying from data vendors. One way to do this is by comparing third-party data with Pernod Ricard’s own data. For instance, a third-party data set of a company’s current subscribers can be shown to be unreliable if its first-party data shows those same people clicked on an ad and signed up to become new subscribers. “We’re buying the appropriate data and then seeing what the response is from the activity to determine whether it’s valid,” explained McQuaid. “Clearly, our preference is to use our own data where possible.”
His comment doesn’t mean third-party data is dead in the eyes of advertisers like Pernod Ricard, but its role is changing. Third-party data will be used to “add color” to an audience profile or provide indication of intent, rather than as the core audience targeting method in a campaign, said Nick McCarthy, svp of data solutions of Merkle’s Europe, Middle East and Africa business.
McQuaid declined to reveal the results of those tests. There’s no incentive to publicly name bad actors, and in some cases, advertisers are contractually bound to keep quiet. Agencies are also in a bind where if they name bad actors, they can be held liable by brands. The best approach, according to ad tech firm Sonobi’s Chief Operating Officer, Justin Kennedy, is for marketers to conduct appropriate due diligence on data partners to know what they’re paying for upfront.
According to Infectious Media, which has extensively tested third-party data on behalf of its clients, it’s often difficult to get complete transparency on the third-party data supply chain. “Where we can’t get the transparency we require, we generally find it better to source data directly from publishers to ensure provenance and quality and to eliminate hidden charges in the supply chain,” said Dan Larden, Infectious Media’s global strategic partnerships director.
Rather than rely on agencies to help detect those hidden fees as some advertisers are, Pernod Ricard has turned to its in-house team of experts. The advertiser “still has some way to go” on bolstering its own data analytics expertise, McQuaid admitted, but it has made progress over the last 12 months. Furthermore, the business is reorganizing its central marketing team with the appointment in July of former finance chief Christian Porta to oversee its brands, a move it said will allow the global team to work better with local teams on issues such as data transparency.
Pernod Ricard’s attempt to unbox the data it uses has greater urgency ahead of the enforcement of wide-ranging data privacy laws governing advertisers’ management of Europeans’ personal data. In order to comply, the alcohol manufacturer will need to know in many cases that consumers have given active consent for their data to be used and will consequently have to get closer to the source of any data it buys. This will mean asking questions about how the data was sourced and whether all the correct permissions were obtained, which could potentially lead the advertiser to uncover more dubious activity in its supply chain.
Image courtesy of Pernod Ricard.