The prospect of data sharing through a cooperative arose just last month when a group of premium publishers -- including The Guardian, CNN International, Financial Times, Reuters and The Economist -- formed a digital ad alliance that would be fueled by programmatic technologies. Included in the co-op is an agreement to share data with one another.
But just how common are data co-ops in the online world, and what do today’s marketers and customer insight professionals make of them?
The topic arose when digital ad tech firm Adroit Digital was speaking with a Forrester analyst that previously worked at Abacus, an original offline co-op. “The conversation led to the fact that co-ops are embraced and proven to drive business in the offline world, so why aren’t they being embraced online?” an Adroit representative said to Real-Time Daily regarding the origins of the report.
In January 2015, Adroit commissioned Forrester to conduct a study to answer those questions, and the results of the study are now out.
Prior to asking Forrester to carry out the research -- in which it surveyed over 103 customer insights professionals and 100 digital marketers from the U.S. -- Adroit had a two-party hypothesis: that most digital marketers are not leveraging a data cooperative and that doing so would better business outcomes.
The report defines a data cooperative as: “An online pool of shared shopper data as well as shared first-party digital data from other brands/publishers.”
Just over half (58%) of those surveyed said they use “moderate” to “extensive” amounts of third-party data about their customers to inform strategy, while 38% currently share data with business partners. “[This] would indicate that marketers understand that they can’t limit their insights to only the data they generate,” writes Forrester. Only 7% of respondents said they don’t use any third-party data to inform online media strategies.
About two-third (68%) of respondents said that data about shared customers from business partners is the third most valuable data to their overall marketing strategies, behind first-party data and planning/forecasting data.
By and large, however, Forrester’s research found that marketers are split neatly down the middle when it comes to seeing value in data co-ops.
Just under half (46%) think data co-ops lead to better customer experiences, 42% think they drive better marketer ROI as a direct result of participating in a data co-op, and 40% think data co-ops provide better access to customers across channels.
In theory, at least, the benefits of a data co-op are exponential: the more participants, the more data for cross-referencing, analyzing and comparing. But if only about half of marketers are using (or see the benefit in using) data co-ops, that leaves a plethora of untapped data out there -- which may in turn cause those in the data co-ops to not see the benefits they initially expected, causing them to invest less in the co-op.
Forrester didn’t analyze this hypothesized cycle of mine in its report. However, the research firm did ask respondents to remark on the difficulties of data co-ops. Privacy concerns and security controls were the top two concerns, followed by time, discoverability, cost and the variety, volume, variability and relevancy of the data shared.
The full report can be found here.