The news that Spanish telecoms giant Telefónica is gearing up to launch a platform that will "let clients know what data Internet firms have, so the client can decide what to do with them," can be read as a move by the telco to get a leg up on the likes of Amazon, Facebook, and Google--which have the edge in the data trade. It's just one event in a flurry of activity as companies race to harness data owned by others to enable more contextually relevant and effective advertising--thus enabling brands and marketers to communicate with consumers in a way that produces positive results and deepens engagement.
But Ritesh Gohil, Head of Client Services, Global, at AMNET, the programmatic group belonging to the Dentsu Aegis Network, tells me the real push now is coming from brands eager to cut advertising wastage and boost customer loyalty. "Brands want to save their media dollars and have better consumer conversations, and they can achieve both by understanding and using more consumer data to build a more holistic view of the customer," he explains.
Consumer data enables marketers to have better "consumer conversations." Image courtesy of Adsquare
The end-game is granularity and clarity--and both are achieved by "mixing and matching data to produce data sets of real digital consumer behaviors that are much more accurate and therefore allow brands to be much more precise and personal in the way they target and 'talk' to consumers," Gohil says. The opportunity--and the challenge--is to choose and combine data sets in ways that will allow marketers to improve audience targeting without impacting accuracy, or limiting scale.
Connecting the dots in the data produces a rich and detailed picture of the consumer and paves the way for the delivery of contextually relevant conversations, creatives, and campaigns. "Brands are starting to make a shift, and are only really able to do this well in relatively closed ecosystems," Gohil notes. The results beg the question: Would more and open ecosystems that break consumer data free of their silos make it possible for more players to take advertising relevancy to the next level? The easy answer is yes--provided these ecosystems also address growing concerns around data ownership and leakage.
Metro Group, the fourth-largest retailer in the world measured by revenues (after Wal-Mart, Carrefour, and Tesco) with operations in 30 countries worldwide, is excited and concerned about the benefits around "leveraging second-party data to offer tailor-made services, marketing or messaging to the right audiences at the right time in the customer journey," notes Richy Ugwu, Head of Digital Innovation at Metro in Düsseldorf, Germany.
It's about understanding the entire customer journey from mobile interaction to in-store transaction, Ugwu explains. He adds, "We can be certain this would add value that is in the interest of the customer. But can we be 100% certain there will be no data leakage in the process?" Metro isn't the only company worried about losing control over valuable customer data. "Privacy concerns" and "security controls" top the list of issues holding the industry back from sharing or selling customer data.
A 2015 Forrester Consulting study commissioned by Adroit Digital reveals the vast majority of digital marketers and customer insights professionals in the U.S. prefer to use customer data and analytics internally, and bristle at the idea of making them available to external clients or business partners. But a significant number of respondents--one in 10--said they were considering selling data or data services to customers and business partners, and 9% reported they already did so.
Sensing the business opportunity Zalando--Europe's leading online fashion platform that counts over 19 million active customers across 15 markets and 160 million monthly visits across 1,500 brands and 150,000 products--has spun off Zalando Media Solutions (ZMS). The aim, according to Jerome Cochet, SVP Advertising & Sales, is to "leverage the data points we have about our customers and our partners to help the brands address specific target group typologies as well as customized brand audiences."
Through the acquisition of nugg.ad--a company specialized in audience targeting and data management--in December 2015, ZMS is further developing its data management platform, which makes Zalando's first-party customer data available to the 80+ brands already working with the company (which include fashion brands such as Adidas, Armani Jeans, Converse, G-Star, and Nike, as well as non-fashion-brands such as Avon and P&G), and makes it possible for other data owners to contribute their consumer data to the pool. "By combining data points you can generate deep consumer insights," Cochet explains.
While first-party data owners such as Zalando pursue strategies to make consumer data available to clients and partners in a controlled platform, it's not necessarily a model that will drive the "Data Ecology" that will allow all stakeholders (and data owners) to prosper, observes Mickey McManus, chairman and principal of MAYA Design, a design consultancy and innovation lab, and co-author of the book, Trillions: Thriving in the Emerging Information Ecology. For that to happen, McManus says, data will have to flow.
"Think of data like water. If it was captured and sequestered in some underground aquifer, all life would die." In the Data Ecology, just as in nature, the flow cannot be impeded as it impacts everyone in the ecosystem. "If only one company--or handful of companies--have the data," he explains, "then it's not a sustainable ecosystem."
This is why Adsquare, which calls itself a neutral mobile data exchange, is spearheading an approach aimed at enabling a more open data ecosystem. It’s a smart move aligned with the company’s wider vision to make all data accessible for more relevant advertising and marketing. A decisive step in this direction is this week's launch of a new private marketplace for audience data. Adsquare CEO Tom Laband tells me it provides the “foundation for first-party data owners to make their rich data assets available for programmatic advertising.” More importantly, he says, it gives “all data providers full control and transparency over who is using their data, and for which campaigns.”
The private marketplace also addresses some key concerns around data ownership by innovating on the proven and trusted model we know from media buying. “The challenges around data usage control have been solved for the media world through private marketplaces where publishers control access to their premium inventory,” Laband explains. “This is exactly the model we have applied to the data world.”
Moreover, pre-bid integrations with leading media buying platforms--such as The Trade Desk, Appnexus, and Google’s DBM-- are a boost to data security. “Data never leaves our platform in bulk--it is just used for real-time enrichment,” Laband explains. The result is what he calls a “new breed of data exchange” because it is mobile-first, self-service, and real-time.
"In nature your waste is someone else's food," McManus explains. "In the Data Ecology there is a similar carbon cycle." Through interactions with computers, devices, apps, appliances, and trillions of sensors that permeate our environment, he says, "we emit data exhaust, creating the opportunity for new players to collect, capture and, ultimately, turn data 'waste' into a valuable resource for every business everywhere." In other words, the amount of data about consumers, and the number of players that have it, is growing—with no signs of slowing down--and so is the requirement for models, mechanisms and marketplaces that adapt to this change.
