By Eric Marterella, CRO, Lotame
For advertisers, data is the lifeblood for any successful digital campaign (video and beyond). And as data becomes more critical for decision-making and strategy, investments are set to explode. According to a study by the DMA and Winterberry Group, 40 percent of marketers expect their data-driven marketing outlays to increase moving forward. Similarly, 40 percent also believe that their revenue will increase as a result of their investments. Data is the engine that’s powering opportunity.
But how will data strategies evolve in 2018? As spend goes up, advertisers need to understand how data-driven advertising is changing, and what the future will look like to maximize ROI. Here are three key data trends to expect in the New Year.
GDPR is coming.
Beginning next May, the EU will face a new regulation that strengthens the protection of digital data for consumers. Called the General Data Protection Regulation (GDPR), this rule will give people more say in how companies use their personal data. For advertisers, this brings several challenges relating to personalized ad experiences, as well as increased costs for compliance. Since GDPR lumps together anonymous and personal data, advertisers worry that this new rule will make it more difficult to deliver strong ad experiences. Compliance is also a cause for concern. A McKinsey report discovered that under GDPR, compliance efforts will be difficult due to varying interpretations of its impact, meaning and applications. Those who don’t comply by next year’s deadline will see massive fines.
While these anxieties are warranted, GDPR will also provide advertisers with many benefits once implemented. Since the regulation will impact which data can and can’t be collected, advertisers will have to focus on the highest-quality data. This will help advertisers develop better ad experiences for consumers. So in the coming year, it’s important for them to understand the challenges that GDPR might bring, along with how they can benefit.
Second-party data is king.
Second-party data was all the rage in 2017 and that will continue in the New Year. Second-party data is essentially someone else’s first-party data that you access directly from them. There is no data aggregator or other “middleman” in the exchange of second-party data. Through a direct relationship with the owner of the first-party data, you can define exactly what data is being bought or sold, the price of the data and any other commercial terms.
The possibilities with second-party data are endless. Advertisers can choose the data sources they feel are most relevant to their campaign optimization, filtering out all the unnecessary stuff. This is where you can take data-driven marketing to a place that is not only unique, but extremely efficient. And what second-party data may lack in “scale,” it makes up for with precision.
In 2018, second-party data will explode in demand, driven by advertiser calls for transparency and clarity in the data they use. By cutting out the middle-man, marketers can go directly to companies that they know will have the most important or high-quality data. The data is unique and a direct relationship is in place, so quality is never an issue.
Quality over quantity.
In data-driven advertising, 2017 was the year that scale mattered less than quality. And this trend will continue into the New Year. The industry as a whole is continuing to face challenges that are altering how they conduct their ad campaigns. This past year, brand safety was one of the industry’s hottest topics, with the YouTube controversy at the forefront. Now, advertisers have grown more cautious about the types of content their ads appear next to. Ad fraud and viewability are two other concerns impacting the space, costing advertisers approximately $6.5 billion this year. As a result of these challenges, advertisers are putting a stronger emphasis on quality data.
The technology vendors that will win in this environment will seek ways to increase transparency, even if it means sacrificing scale. This is what advertisers want. For platforms to be successful, partnering with third-party attribution and quality measurement platforms to validate impressions, inventory, data, and beyond, can go a long way in the post-scale era. And with new data privacy regulations coming into play — including the aforementioned GDPR law — there will be a bigger emphasis on higher-quality data instead of quantity. Next year, advertisers will continue to realize how important it is to focus on the most meaningful data.
Data is the key to opportunity for online advertisers. In 2018, the conversation and key themes in data-driven advertising are likely to evolve. Paying attention to GDPR, utilizing second-party data and focusing on high-quality data — not just scale — are three ways that advertisers can succeed in the New Year.