2014 and I haven’t written anything about big data yet? About time!
Everyone talks about big data and that it is all so important to use to target the right audience and user and so on. But how good is third-party data really?
The best data is still your own, the first-party data; third-party data, collected by others, is often not well qualified, or if it is, it comes at a price not worthwhile unless you have a very niche audience. And when I say worthwhile I mean in regards to “performance vs. costs” (see below). The further south you go from the UK into central Europe, the less qualified the data becomes. In the US however, where data relies on a big homogenous publisher market, its use is much more justified.
Why is that? If you'd bid £1 CPM and add £1 on top for data, you don’t necessarily halve your CPA, so that’s no good. Instead, it might be better to experiment a bit with niche audiences, more appropriate creatives and building your own audience data from your campaigns. Your own data is cheaper and more reliable, too.
Yet, the really interesting bit in my opinion is the combination of different data sources: demographic, TV sync, first party, predictive, etc.
The concept of big data is not new, and the authors of Big Data: A Revolution that will transform how we live, work and think emphasise how we have collected data for generations, but we only now have the technology to analyse it at scale. Whilst data answers the “what is happening questions”, only the slicing and dicing of it will answer the “why is it happening” question.
Let’s just keep it simple: Over the last few years we have started to collect more and more user data. Whilst I work mainly on the demand side, this is also happening on the supply side, and across the eco system. More and more companies see how they can match data from TV to second screen, and how they can match data sets from one screen, e.g., laptop/desktop, to mobile screens, e.g., mobiles and tablets. This process is still in its infancy but new technology allows us to make progress on those fronts.
On the one hand, more third-party data providers and audience networks use their own technology to manage and qualify data. They work closer with publishers to make data available at a higher quality and lower costs. This, in return, should see the uplift of usage of data, resulting in the increased ROI for campaigns in the direct response area.
Branding campaigns, on the other hand, will benefit from more targeted branding campaigns based on demographic and behavioural data = audience data. So we should see less wastage and more targeted campaigns, resulting in a brand uplift; also audience extension campaigns will perform better, using external data to scale your audience.
A real key aspect of data is uncovering hidden patterns in what’s happening in your business by giving it a more structured analytical approach. This helps to improve your business, whether this is online or offline. Of course, the internet made it possible to collect more vast amounts of data and being able to compare it to other data sets.
And if the CMO from today works well with their partner on a data strategy and utilises the tools available, then the future will result in a more data-driven world, which will benefit businesses and consumers alike.