September 29, 2017
No matter what industry you’re in, you’re probably hearing a lot about consumer data. A recent article by The Economist compared the value of data to that of oil. In marketing and advertising, the value of customer data can’t be understated. Despite data being ubiquitous in digital marketing today, brand marketers and agency buyers alike are skeptical about the transparency and effectiveness of their advertising data partners. According to research we recently conducted with Advertising Age, three out of four marketers surveyed said they are not entirely confident that their data is reaching in-market consumers. Clearly, there are serious trust issues between brands, agencies, and their data providers — how do we fix it?
We’ve written about how brands and agencies can ask the right questions of their advertising data providers to feel more confident about the data driving their campaigns, but is there anything else they can do to ensure the relationship is productive? And what can data providers, like us, do to be proactive about instilling confidence in their clients?
Here are my best recommendations for ensuring that the relationship between marketers, agencies, and advertising data providers is one of mutual trust and benefit.
Data:
Despite nearly all (95%) of the marketers surveyed saying they employ first- and third-party data in their media plans, a staggering 64% are not fully clear on the origins of their data sources. Distrust and dissatisfaction with data transparency is clearly the root of a lot of the issues in the industry today, and both sides of the table need to take steps to improve the situation.
For brand marketers and agency buyers:
In addition to the confusion around data sources, nearly one-quarter of both brand marketers and agency buyers do not know how often their data sources are refreshed. Marketers and agency buyers need to push partners to provide clarity on data sources and data freshness in order to be confident that their campaigns will actually reach their target audience. Marketers and buyers should educate themselves about what defines good data and then ask their data provider these critical questions to get necessary clarity.
For data providers:
More than 60% of respondents said using first-party data is very important to their overall marketing strategy. Additionally, 54% of agency marketers and 62 percent of brand marketers said that, in an ideal world, they would be using first-party data in more than half of their campaigns. Data providers should take this to heart and strive to provide only trusted first-party data that moves the needle for their customers.
Communication:
The lack of trust between data providers, brand marketers, and agency buyers can breed dissatisfaction. 34% of brand marketers and 24% of agency partners believe their data partnerships lack innovation, so there is a lot of room for improvement. Effective communication from all parties can mitigate some of these issues.
For brand marketers and agency buyers:
In addition to asking data partners the tough questions upfront, marketers and buyers should also define their target audience, clearly communicate it to data providers, and be consistent with their desired outcome. Many data providers innovate based off feedback from clients, so highlighting the ultimate goals and success metrics can help improve the product and relationship in the future.
For data providers:
Most importantly, providers should serve as a strategic partner to clients, so they can rely on you to make data-driven suggestions for improvement. This means understanding the broader campaign strategy and goals, overcommunicating about campaign progress, routinely asking for feedback, and refining as necessary. Be willing to adjust and innovate for clients to further meet their needs. Marketers and buyers have made themselves clear — they consider the ability to surface potential new customers as the #1 quality of “good” data, so look for ways to help achieve this goal.
Measurement:
Only 23% of survey respondents are fully confident that their third-party data partners deliver against KPIs. If each party defines success differently, or worse, there is no definition of success, the only result will be confusion. Once marketers and ad buyers have defined their audience and broader campaign goals, then they should discuss metrics of success with their ad providers. Both parties need to be on the same page before moving forward with campaigns.
For brand marketers and agency buyers:
How do you measure success? By in-view percentage, clicks, sign-ups, or return on advertising spend (ROAS)? Is it some combination of these? Brands and agencies are responsible for understanding how their campaign KPIs translate to the high level goals of the brand. To get the most out of your providers, it is important to be transparent about both the campaign KPI, as well as your broader end goals. Let them work with you to build the most relevant audiences for both these narrow and broad goals. For example, if your KPI is Coupon Downloads, let your provider know this. They may be able to tailor their audiences to deal-focused consumers and ultimately drive greater sales. Being transparent with your providers will allow them to be the best possible partners.
For data providers:
It is in data providers’ best interests to clearly define metrics of success in advance of a campaign. Listen to clients’ goals and make recommendations for the metrics that best fit the campaign. Most importantly, data providers are responsible for proactively reporting on progress. Set a regular reporting schedule based on the campaign and provide results to clients, along with recommendations and questions. This cadence will keep the flow of communication open and allow time for adjustments if necessary. Finally, be transparent and honest about successes and failures.
The trust issues in the advertising industry can’t be solved overnight. But through the above steps, both sides can begin to close the gap. Ultimately, it comes down to transparency — in data, communication, and measurement. To read more results from our study with AdAge of 300 brand and agency marketers, view the full report here.
