• by Marc Kiven , Columnist, October 9, 2017

Any time a brand cuts up to $140 million in digital spend and its sales immediately rise, you know something is fundamentally wrong with the way the advertising industry does business.

We’re not talking about just any brand, either, but Procter & Gamble, the single largest digital advertiser by volume — a brand so big that its spending shakeup triggered the demise of one of its key adtech partners. Tellingly, its spending reductions followed months of pointed criticism against both the complexity of the “messy” ad tech ecosystem and the opaque data-sharing practices of the walled gardens like Google and, especially, Facebook.

The central point was that both independent adtech vendors on the one hand, and the larger platforms on the other, expropriated the customer relationship to a point that P&G was effectively denied access. Unilever has since followed P&G’s lead, making even deeper cuts and experiencing similar results, and now smaller brands are wondering if they can afford to slash their budgets, too. 

As technology vendors serving marketers, we need to realize that our only chance of beating Facebook and Google is actively putting brands back in the driver’s seat when it comes to the ownership of their customer relationship. They’ve got real cause to feel that they’ve lost control: the siloed and fragmented nature of advertising technology prevents marketers from realizing the value of their most critical asset — their first-party data, the trove of direct interactions between the consumer and the brand. Too often, brands give up control of that data to the vendor, and hope for the best. And if the brand pulls the plug and chooses not to work with that technology any longer, its relationship with the customer goes back to square zero. 

Brands who emulate P&G and reassert their rights can do so much once their first-party data is under their control and put into action. This data is the bedrock of consumer insight — a comprehensive catalog of information drawn directly from brand interactions across touchpoints, including CRM, POS, website and mobile app behavioral data, as well as in-store purchases, online transactions, loyalty program activity and service/support contact interactions — and it offers unprecedented visibility into what customers want, as well as where, when and how to most effectively fulfill their desires. 

Strip away full ownership and authority over first-party data, however, and this window into the world at large slams shut. Brands can only individualize experiences for customers they recognize, after all, but when vendors don’t (or can’t, or won’t) return data to a brand’s internal systems, the brand is unable to close the loop on attribution, forcing it to share even more data with vendors to process connections.

Consider how a videogame publisher might leverage its first-party data to more deeply understand its players, their preferences and their motivations — a go-to move in a football game, for example, or a particularly precarious curve in an auto racing title — in turn optimizing the customer experience and driving more efficient media spend and return. When all of the publisher’s data is centralized in one place, there are no issues with measurability or understanding campaign impact.

Compare that to sharing data with partners like Google and Facebook: As long as the game publisher continues to purchase media with them, they’ll create the proper audiences used for targeting and retargeting. But if you're a global or multi-national brand, you can't centralize that data on one platform. Moreover, the publisher’s hard-won data is supplying Google and Facebook invaluable insight into the collective gamer psyche — intelligence that not only benefits Google and Facebook, but additionally benefits any rival gaming companies also buying media from them. 

Brands that fail to assert control over their first-party data will be forced to continue their reliance on black box, end-to-end solutions that in essence treat the customer relationship as a campaign: when it’s over, it’s over. They might get some sales lift, they might get some new acquisitions, but they don’t create value they can translate into long-term loyalty and retention. If anything, this complexity and opacity erodes the long-term value proposition of adtech and digital as a channel. Look no further than P&G and Unilever for proof. 

Customer data needs to rest in the marketer’s hands. It can’t become an asset of Facebook. It can’t become an asset of Google. It can’t become an asset of the technology vendor. It has to be an asset of the brand or enterprise, which must be empowered to use it at will, without restriction, to connect to its customers across channels. Brands shouldn’t settle for anything less.