The programmatic buying of digital ads has transformed the display market over the last few years. The proportion of display ads bought programmatically continues to rise year on year - The Boston Consulting Group estimates that the total digital display and video ad market in APAC will increase from $14.5 billion in 2017 to $19.0 billion in 2020 and that programmatic’s share will rise from 19% to 36% over this period. And the ever-expanding display LumaScape demonstrates just how many moving parts the modern marketer has to juggle. Therefore it makes sense that third-party audience data can sometimes get overlooked as there remains some common misconceptions about the role it can play.
Let’s explore how the intelligent use of audience data can push your marketing strategies to the next level and help you make confident data decisions.
#1: I only need first-party data
Marketers often feel that all they need is their own first-party data, such as CRM, transactional or location data. However, there is often not enough of this data to build meaningful segments to target new audiences. The less first-party data they have the harder it will be to find people who match the profile of buyers. The addition of high quality audience data enables marketers to look for other criteria that help drive a sale, making it possible to extend the reach of campaigns. There is also the issue of scale and growing a customer base. Is a brand only ever going to target and re-target its existing customers or those who have visited their site? Audience data adds scale, reach, and relevancy when used in conjunction with first-party data.
#2 I don’t need to pay for third-party data on top of my inventory costs
Programmatic buying has automated the formerly tedious ad buying process. In about 150 milliseconds, the bidding for an ad has been completed and the relevant creative has been served to the page ready for download. Through machine learning, campaigns can be optimised for delivery and performance but it makes little difference, of course, if the wrong audience is targeted in the first place. You need audience data to ensure your ads appear in the right place, delivering the right message to the right user at the right time.
Marketers should define what percentage of their display ad spend goes into actual targeting. Privacy-complaint, qualified audience data will require some budget allocation - quality data will not be free. Also your data provider will be able to work with you to understand your campaign objectives and build your data strategy with you - effectively bringing a data expert onto your team.
#3 Third party data is poor quality data
There is a common industry myth that one type of data is better than the other, but third party data is simply somebody’s else’s first-party data. It is data that is curated anonymously from offline and online sources and activated into market-specific audiences built on demographics, interests, lifestyle, purchase intent, industry and seasonal events. The reason why third-party audience data has worked so well for marketers is that it offers depth and scale, and has been refined for marketers and media buyers.
It’s undeniable that there are some ‘bad actors’ in the marketplace but as legislation becomes more stringent across the globe, these will be weeded out. The key is to ask lots of questions of any data provider.
#4 I already have a lot of data
More is not always best. For marketers, a large amount of data is beneficial in understanding your target audiences, but only if you have the resources to collect, process and house it all. They need to consider which data makes the most sense for their campaigns. Ex-Publicis CEO Maurice Levy has previously compared the mass of data to an oil field, saying: “Owning the oil field is not as important as owning the refinery”. The same applies to data. You need a ‘refinery’ to extract the real value from it. Unprocessed data is largely useless so you should work with a data partner to help data make sense.
#5 Cookies mean zero privacy
GDPR in the EU has bought the issues of privacy and consent to the forefront of both consumers and marketers minds more than ever before. However, when collected legally, they remain the industry standard way to allow content to be personalised and for behaviour to be tracked. Brands use them to learn more about their users’ favourite content by tracking cookies and to ensure that the same ad does not keep appearing. Cookies are anonymised and are not used to collect identifiable data, such as names, phone numbers and email addresses.
Ask any data provider that you are considering working with about their collection methods so you can be confidence that you are using privacy-compliant data.
Imagine if your competitor is choosing inventory that matches tightly defined set of criteria, driven by a mix of highly relevant audience targets. If you work to a looser definition of your target audience your campaigns may not be delivering optimal results. To borrow Maurice Levy’s analogy, it is like buying the oil field but deciding the refining process is too expensive to consider.