Commentary

Realigning The Data Seller's Mission With Marketers

There’s a persistent myth in digital advertising that data can solve every issue a marketer has. Vendors preach about helping advertisers find thousands of new customers they didn’t know existed, using digital behavioral signals. They promise ease of use, and the idea that campaigns are only effective when they hit the biggest audiences.

This isn’t true, and the myth persists because the market is dictated by the data seller, not the marketer. The digital audience data industry is built on maximum ad delivery, and the maximum revenue return that comes from selling big-scale audiences. This juxtaposes digital advertising’s promise of an efficient way to reach the “right” consumer. Marketers need to be aware of three key areas where data sellers have become misaligned with the marketer’s mission.

1. Scale

What’s often sold as “audiences” isn’t a group of individual consumers, but a pool of cookies that match profiles. Third-party data revenue is often tied to the number of cookies within an audience, not the efficacy or efficiency of campaign performance metrics. An “auto buyers” audience includes as many cookies as possible, regardless of how active the cookies are historically, whether they dictate human behavior or exhibit machine-like tendencies, or if the end user exhibited more than one action that would qualify them as in-market. Buy-side optimization weeds out unqualified prospects, but the brand still pays for those cookies.

Focusing on scale means that there’s less regard for fraudulent cookies, which often aren’t removed from the model. If data providers cared more about efficacy, they’d have to filter out suspect traffic before passing it on to the advertiser or trading desk. This takes research and development, at great cost to the provider.

This is why many fraud-protection vendors enter the process after data is purchased. Pre-bid solutions solve the symptoms, not the problem. Zapping bot traffic at the time of the impression is akin to stopping barbarians at the gates of Rome after letting them pillage the countryside first. Data vendors that skip this step are admitting that doing the right thing is more difficult and expensive than taking the easy route.

2. Infrastructure

Consumers don’t stay in-market forever, and more media choices have created a chaotic and unpredictable path to purchase. Marketers want to reach in-market consumers as quickly as possible and use fresh data to target their ads. 

This takes heavy investment in computing power, and providers are often not aligned with marketers when it comes to freshness. Data providers would have to keep their servers turning 100% of the time to ID when a user falls out of market, and then update the audience they’re selling to reflect the most change. Most providers don’t want to shoulder that burden. Instead, they’re incentivized to keep costs low and accept wasted marketer spend as a casualty.

3. Custom audiences

Marketers can extract value from their own data sources and supplement that with third-party insights. This process requires a data provider ingesting a seed set and then finding more users who are similar to the brand’s existing customers. 

The tradeoff is that fully custom-built audiences require upkeep and a technical rigor that a standard audience does not. Undergoing this process for every advertiser is more difficult than pre-packaged segments. Again, the cost of doing the right thing on behalf of the marketer does not align with the data provider’s incentive.

Finding alignment

Marketers can overcome this misalignment by ensuring that they’re purchasing well-built and effective segments, not a box of cookies. Efficient spending requires a deeper understanding of the market. Data-driven marketing isn’t simply buying data and using it to deliver campaigns, but using data-driven methodology to create the audiences that provide the greatest long-term value. 

A proactive approach to building personas will incentivize the data industry to invest in the hard work. The only way a majority of data providers will trade short-term gains for long-term sustainability is if their hand is forced. By investing more time in data creation, curation and maintenance, providers can create a stickier product that marketers will invest in repeatedly, rather than for a one-time use.

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