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The way we use data in digital is past its sell by date – why, and what needs to change

First off, despite the title, I want to make it clear that it’s not my intention to lecture you on how the way you use data in digital at the moment is inherently wrong. The current system works and while performance is reliant on the level of expertise employed and the quality of the data used I’m sure you’ll agree that it is possible to get some very good results.

However, what I would like to do is draw your attention to a few irregularities in the current digital ecosystem and point you in the direction of the next generation of digital advertising. This is new, it’s big and it’s the future.

Challenges with the existing process

In the current digital ecosystem there are several issues which make it extremely difficult for brands to implement customer-centric data strategies.

First and foremost, data is not being used at every touchpoint across the funnel. The same data and audiences are not being used consistently across programmatic, email, social or all other available channels. Granted, there are parallels, but we do not yet have full alignment because of the way we currently use data in digital – most significantly in programmatic.

Another challenge comes with the ability to scale the way we build audiences for real time bidding. Data is currently purchased as a fixed cost and then deployed. What happens when a marketer wants to widen reach or engage with more potential customers? The accuracy reduces, or it’s back to the drawing board to build another audience. The impacts? It’s more expensive – and more importantly – the experiences you deliver are not as accurate and relevant as they need to be.

Thirdly, many people have heard about the ad tech tax – where multiple small players all take a slice of advertising budgets. Nowhere is this more prevalent than in the way data is currently used.

With two audiences being created, by the publisher and the advertiser, often it means data is purchased twice in that process – and who pays for that? In the end? Sure, the costs are footed by the advertiser but in reality it’s the consumer who gets a less relevant and worse experience.

Finally, brands need to be customer specific, not channel specific. The way we use data in digital currently hinders our ability to connect all the dots together and align on the audience.

Data at the point of interaction

The solution is channel-agnostic audiences which are non-channel specific and what is known as ‘data at the point of interaction’.

Data at the point of interaction is the concept of applying and using data as close to the interaction as possible rather than in predefined audiences. While this is highly possible in a number of channels the greatest challenge lies in real time digital advertising (media/programmatic) so I will focus my attention there.

The attraction of programmatic advertising is that it allows marketers to consider who is generating an impression, not just where an impression is being generated, and tailor their purchasing strategies accordingly. Typically, data is applied to the system through DMPs, which are platforms designed for this very use-case: taking all your consumer data, and applying to the ecosystem to inform your buying policies. However, DMPs only have access to external data sources at fixed prices, which undercuts the value of the auction process. The same is true for publishers: they are using DMPs to set their floor prices and define private market-places; but again using third-party data comes with a flat fee.

The way to solve this is to apply data at the point of interaction – in the auction itself. Experian has developed a process in partnership with the ad exchanges to enrich bid requests with our data. This means that data is paid for only once; and because it is applied to the bid request itself, the price of that data is now determined dynamically through the auction process: advertisers are bidding on the combined package of media and data together.

This is not to minimise the importance of DMPs in the programmatic space: they remain critical tools for applying proprietary data and gathering insight. The limitation comes on how they are required to access third-party data. This process of enriching the bid request enables advertisers to access this data in a more sophisticated and scalable fashion, helping them execute true people-based marketing through the consistent applications of data. It delivers better experiences, better return and a much stronger foundation for data governance.

What you need to consider

In conclusion I really want people to look into these new processes as the really are the best ways to put the customer at the heart and drive greater value through delivering better experiences.

As marketers, we need to ensure we are doing what we can to be truly channel agnostic because only this way can we be certain that our data strategies are consumer centric.

I urge everyone of us to challenge the status quo by taking a step back from your day to day and putting your processes and the techniques used under the spotlight. Ask yourself ‘is this truly achieving the best outcome for my customer?’

For more information on data at the point of interaction please watch this recorded presentation with Alastair or contact us.