Jeff Sporn is svp & gm of digital solutions for IXI Services, a division of Equifax, the consumer credit reporting agency.
Part of a growing trend in the restaurant industry, establishments make a point of telling patrons the sources for the evening’s menu. The idea is that when diners learn that the produce and meats come from local farms, their minds will be at ease. The feeling could be applicable for the online data industry as well, where advertisers and agencies pick a data set from the menu and want to know its source.
Unfortunately, this trend of revealing sources has not yet materialized with online data. Industry self-regulation efforts have done a great job implementing consumer-facing transparency practices. But this focus on transparency is largely absent from the business-to-business transactions fueling the sector. That’s just wrong — transparency should be at the heart of every business.
Audience targeting is gaining momentum within online advertising, which means that data and technology are more important than ever before. Advertisers want to drive consumers down the funnel, from display to search to purchase, and the right data set can highly influence how, when and where advertisers reach these consumers.
Unfortunately, the data industry at large remains a black box, where companies operate with a great deal of opacity and make it nearly impossible to differentiate without actually investing in a trial run. Advertisers will pay a premium for data that performs, but a crowded market makes it difficult and expensive to experiment with enough providers to get a clear understanding of which sets provide the greatest results and return, with the latter often defined as more clicks.
Data providers extol their robust solutions, offering data culled from social networks and shares or focusing on audiences like influencers and intenders. Forrester predicts that by 2014, more than 50 percent of all consumer purchases will be influenced by the Web, which means advertisers should be serving messaging to consumers within the funnel. Today, advertisers rely on cookies or search data to go after intenders, but this data isn’t particularly helpful if the consumer can’t actually afford the product. It’s safe to say that not everyone searching for a Maserati can afford one. Most will end up buying a Honda or a Buick.
Marketers only want to reach consumers who can actually afford their products, which puts a spotlight on the financial data market. But financial targeting data comes with its own unique sensitivities, in addition to the differentiation issue. Financial data is a great tool for online targeting, provided it’s sourced appropriately and devoid of any personally identifiable information. So, before investing in financial insights to power online targeting, buyers need to know three things: (1) Is this really financial data from a reliable source? (2) Is this data permitted to be used in this manner? (3) Am I avoiding PII?
If a data provider can’t verify all three, then there’s no reason to even consider a contract. As the stakes surrounding the data set grow, so does the importance of transparency. Advertisers, desperate to demonstrate replicable ROI, are beginning to learn that they’re better off buying transparent data than cheap, inconsistent information.
Let’s go back to the food example. A sophisticated diner faced with a choice between a street hot dog and an aged steak from a small farm 50 miles away is never going to choose the processed frank. Advertisers need to choose their partners in similar fashion. Look for the best data that will help you find an audience. In all likelihood, it’s along the lines of first-party publisher data, financial data or previous purchase data, culled from a leading property or first party with a credible track record. Work with providers that are transparent about where it comes from and how the audience profiles are assembled. All the other options are nothing more than processed junk food.