Data is the new currency, but are advertisers spending wisely?
Despite big investments in data, many marketers are headed into the key holiday season knowing little about their data partners or if they’re reaching the right audiences. Contributor Toby McKenna explains how to separate the data contenders from the data pretenders.
It’s nearly impossible to avoid news around Amazon’s foothold in retail, technology and media. Based on the company’s Q2 earnings call, Amazon also expressed significant growth potential in its advertising business, much of which can be attributed to its ownership — and usage — of consumer data for targeted advertising and personalization.
Data is an indispensable asset for advertisers in 2017, but despite the ubiquity of “data” in the general sense, it’s still misunderstood and, in many cases, mistrusted.
As marketers gear up for the competitive holiday season, they can leverage data across multiple facets of their marketing strategy, from planning to optimization and everything in between.
Within the realm of marketing, digital media is one area that stands to benefit greatly from data-rich campaigns that allow advertisers to spend their money to reach only the most relevant and potential customers. But in today’s noisy digital environment, what does it even mean to be relevant to consumers?
For brands and retailers, one of the most compelling signals for relevance is identifying consumers who are “in-market” to consider or buy your products.
There are multiple indicators that could lead an advertiser to believe a shopper is in-market, but one of the strongest intent signals is whether people are actively browsing for your products, your competitors’ products or similar products within your category. This is one area where Amazon, and its inventory of first-party data based on shopping behavior, has differentiated itself from other major data players like Google and Facebook.
There are a multitude of third-party data providers that promise to deliver “relevant” audience segments to brands looking to increase return on ad spend (ROAS) through targeted advertising campaigns. These partnerships carry significant weight during critical shopping windows such as the holiday season, which commanded more than more than $1 billion in advertising budget in 2016 alone. That’s a lot of coin.
Given the amount of money retailers invest in reaching the right audiences, it’s somewhat surprising to hear that so many media buyers and brand marketers are unclear on the source and relevance of their data providers.
A study from the World Federation of Advertisers found that 90 percent of advertisers were actively reviewing their programmatic ad contracts for transparency, which indicates that the vast majority of marketers are looking for more insight into the legitimacy of their data partners. So, what’s a marketer to do?
Make the most of your data investment
Here are a few ways to ensure you’re making the most of your data investment:
- Examine data transparency: If you’re not in the 90-percent majority of peers who are vetting their partners for transparency, it’s time to start asking the tough questions. Dig into the sources of the data, and more specifically, how often it is refreshed. Remember that the freshest data is your most relevant data, which takes us to the next point.
- Evaluate data relevancy: By inquiring about the data freshness, advertisers are ensuring that their digital efforts are hitting consumers with the greatest propensity to buy. Consider how your team and your media partners are defining “relevance,” and prioritize partners who own data that point to a recent and immediate intent to buy, such as product pageviews or interactions with ratings and reviews within a reasonable time frame (days, not weeks).
- Determine data scalability: Data partners that have expansive reach and insight into consumer behavior across the web hold tremendous power when it comes to being able to predict in-market behaviors before they are even demonstrated. For example, if a consumer visits product page A, they may also be in the market for product B. This bird’s-eye view of seeing customer data can be particularly powerful when it comes to surfacing new customers.
Based on Amazon’s success and growth in advertising, it’s clear that behavioral shopping data is extremely valuable to advertisers who need to spend wisely and effectively to reach the right customers. But Amazon’s shopper data is only relevant to consumers browsing and buying within its four walls.
In reality, most consumers browse multiple online stores on multiple devices before making their purchase decisions, so there’s a huge opportunity in advertising for shopper data to be more reflective of how consumers search, browse and buy across the entire e-commerce ecosystem.
Data can be a tricky path to navigate as an advertiser, but the responsibility rests with you to ask the tough questions that will help you separate the data contenders from the data pretenders.
If you don’t get an answer that satisfies you, your team or your clients, keep asking. Armed with these answers, you’ll be able to identify and prioritize partners who can provide transparent, relevant data at scale, thereby maximizing your investment and building your business in the long run.