Who Owns the Data?
Battle lines are being drawn. Who will win the data ownership war?
Battle lines are being drawn. Who will win the data ownership war?
Consumer data ownership isn’t a new issue in online advertising. It’s been debated since the first online ads were delivered on Prodigy in the ’80s and been the subject of numerous industry committees and initiatives ever since.
With industry focus on consumer-specific targeting, whether behavioral, local, or personalized search or desktop adware, we can expect this issue to stay hot over the next 18 months.
Why is data ownership so important? Two reasons: money and privacy.
Money
Publishers can use consumer data to sell more ads for more money. They use audience behavioral and registration data to turn undifferentiated, commodity-priced inventory into premium advertising products. These products perform better for advertisers. Advertisers reward publishers with premium pricing.
Bottom line: The right data, properly applied, mean dollars. This was evident to anyone at Avenue A’s summit in Las Vegas last week. All the speakers, from C-level executives to marketing directors, talked of an immediate need for data-driven audience targeting.
Privacy
People care. They care how their data is used and how they’re treated. Anyone who doesn’t believe that clearly missed the Do-Not-Call Registry exercise last year, which essentially represented the largest, most resounding election in U.S. history. Fifty million people said, “NO MORE!” To most Americans, online advertising means pop-ups and spam.
Listen to what’s being said. People care about privacy. Direct mailers have liberally harvested personal data about consumers for years, but consumers didn’t know it. Those who did know didn’t know they could do something about it. That’s all changed. Online advertising is the battleground.
Key Players
How might data ownership play out in this industry? The best place to start is to identify the constituencies: parties who play with data; own data; use data; provide data; sniff data; sell data. The list could go on. For our purposes, we’ll keep it simple.
Key players in the online advertising data marketplace:
Interactive advertising agencies typically operate as agents or contractors for advertisers and marketers. Generally, their clients prohibit them from owning any of the data, because those clients viewed it as a key asset. An agency’s ability to convert its third-party consumer relationships (e.g., capturing consumer data as a result of an online ad campaign) into first-party data ownership isn’t straightforward.
Battle Lines
Data ownership battles will be fought among technology service providers, as well as between them and the other parties. Tech service providers are custodians of an enormous amount of valuable data. They possess technologies that can turn data into an enormous amount of advertising and marketing value. They don’t have direct relationships with consumers. The data they capture is a result of the fact they provide services to first-party data owners — publishers and advertisers with direct consumer relationships. Many of them view consumer data, or data about that data, as key strategic assets. Many buy data from third-party sources to further enhance and augment their data to make it even more valuable.
Battles will begin when parties with more direct ownership rights — consumers, publishers, and advertisers — understand what data are captured, what’s being done with it, and start to care about it. That will happen soon. Battle lines will be drawn around four concepts:
But is a marketer’s or a regulator’s “anonymous” the same concept as the consumer’s? I think not. If you capture data about a person’s surfing habits or his stock portfolio, tie it to standard industrial classification (SIC) data about the company he works for (based on his IP address), and deliver a targeted ad to him based on that information, not too many consumers would call that anonymous. Watch for a lot of fighting over this definition.
Is a Web analytics company permitted to own even generalized consumers data (e.g., she surfs personal finance content) that can be associated with a specific cookie? Watch for publishers and advertisers to pay lots more attention to their legal contracts and to the definitions of data and metadata.
Data ownership and privacy will be big issues for our industry this year and next. Get ready!