While many in the industry worry that this year’s data-privacy reckoning will harm the business, the truth is, it will actually make it stronger. If marketers and publishers are forced to be more deliberate and strategic with their first-party data, the way that people are with other finite and valuable resources, they’ll provide consumers better, less spammy, more personalized experiences online.
With that in mind, here are five predictions for how data management will change for the better over the next several years.
1. We’re going to start collecting better data. By bringing scrutiny to how companies collect data, the Cambridge Analytica controversy and GDPR will inspire marketers to innovate, to create opportunities to collect more first-party data.
If nothing else, the new privacy laws — including the California one passed in June — will push brands to get closer to their customers. Rather than relying on third parties to collect data for them, advertisers will work directly with publishers for data-based insights — and in some cases, they’ll create new media like their own branded publications to achieve this goal. This direct contact with customers, and the simultaneous rise of the direct-brand economy, means better, more reliable data for advertisers.
2. More advertisers will use data the right way. One of the big misconceptions about GDPR is that it prevents advertisers from being able to use consumer data. In fact, it merely pushes advertisers to use data the right way.
This is good news for all of us who have been conscientious with our data all along, and it’s great news for the industry at large. By providing extra assurance that information will be used appropriately, GDPR gives brands and consumers more confidence in the ecosystem, and more reason to invest and engage in it.
3. Brands will find new ways of thinking about existing first-party data. As it stands, many brands are virtually ignoring their most precise customer information: the opt-in, first-party data they already get from customer loyalty programs and other direct touchpoints.
Unfortunately, many advertisers don’t use this information for a variety of reasons: some companies have trouble processing large volumes of information, while others struggle to track individual customers across their various online and offline channels. With the incentives provided by increased scrutiny and new privacy laws, more brands will turn to data management companies to help them analyze and activate their most valuable data assets.
4. We’ll start seeing fewer, more relevant ads. As brands adopt more precise, first-party data, the industry will be begin to undergo a tectonic shift from “targeting” to “personalization,” favoring relevance to customers more than reach. Relevance will provide higher engagement and comes at a lower cost. Marketers will recognize that they are able to use fewer impressions and ultimately pay less to get the results they need.
5. The rise of contextual data is coming. First-party data isn’t the only kind of information brands will use to execute more personalized advertising. As new regulations place restrictions on how brands can collect and use customer data, they will increasingly turn to contextual data to deliver relevance, such as when a retail brand uses location and weather data to serve ads for raincoats.
For all the forecasts of doom and gloom in the advertising business, new regulations and increased scrutiny are actually going to make the digital advertising industry a much better place. Instead of working behind the scenes to collect and create consumer-based insights, brands will be working more directly with consumers, through data collected by opt-ins, to give consumers more of what they want. Of course, this means brands will get more of what they want, too: specifically, closer and more trusting relationships with their audiences.