Data Wars: Claim Jumpers Monetize What Consumers Own

The first societal reaction was predictably a witch hunt for that which invades privacy The axe was used rather than the scalpel Thirdparty cookies must go society said not knowing what it was talking about and not knowing about all the other ID methods that exist It39s like gun regulators saying quotNo one may own a GlockquotThe quotgaragequot geniuses were a step faster than MIT Stanford where they were doctoral students at the timeamp160and other players who usually lead usamp160in saying quotWell if Ask Jeeves the first userfriendly search engine can do it can39t we do it betterquot And there came Google And similarly Facebook Twitteramp160and FAANGdom in generalSo now we have all this disruption and the garage geniuses have attained a scale never before dreamed possible even by the most perfervid robber baronsScale means negotiating power and since the unfortunate advertiser procurement idea causes media agencies to often think only in terms of price low CPM we see Google going from 106B in ad revenues in 2006 to 16074B in 2019When privacy came along the scaledup top quintile of the first huge wave of internet geniuses now the FAANGs embraced it Perhaps it was altruism Or maybe a mix of that with how nice it is to be given an excuse to hoard all that data to quote Adam Armbruster a longtime top consultant to broadcasters and retailers Adam believes that the deprecation of thirdparty IDs is not motivated solely by privacy concerns but is perhaps more motivated by keeping the walls up on the gardens and thus maintaining significant information advantages over everyone else in the game Hence the title of this column quotData WarsquotAt TRA I found deterministic targeting to be profoundly more cost effective for ROI purposes vs any form of quotVirtual IDsquotamp160lookalikes probabilistic ID graphs or fusion The degree to which zip code cohorts are not accurately predictive of program choices for maximum car advertiser targeting efficiency is demonstrated for example by this metaanalysis summary showing how poorly zip code cohorts predict deterministic householdlevel viewing and car purchase data meaning you would think you were making a greatly targeted buy but it wouldn39t be that at all A perfect score would be 100The following curve representing the trend in Facebook Costs Per Lead shows that CPL shot up as a result of the necessary shift to probabilistic targeting resulting from the thirdparty ID deprecating April 26 2021 release of Apple IOS 145 and then presumably as a result of the drastic and rapid lowering of prices the CPLs returned to their original state or lowerSimmons in 2017 showed that across every brand they measure 3830 brands with at least 1000 respondent users per year over 100 product categories not just CPG the average lookalikes account for only 6 of the variance in actual deterministic brand usage data A study done of IRI data by NYU39s Henry Assael for CBS and TRA showed 16 the highest I have ever seen that parameter go in many years of studySo we can see that there is adequate evidence that we ought not retreat from deterministic targeting so long as we can execute it with full privacy protection which we can TRA never allowed anyone to find out what programs were watched by an individual household nor what products were bought by an individual household Never a single privacy breach nor complaint TRA never even knew who they wereamp160only Experian knew that but TRA did not share the viewing nor purchasing data with ExperianYet the original draft by the walled gardensamp160to the World Federation of Advertisers WFA and its member associations such as the US Association of National Advertisers ANA for the CrossPlatform Audience Measurement Initiative institutionalizes Virtual IDsamp160and refers to panels joined only by Research Cooperators fewer than 30 of the total population who are psychologically different from the other 70 of us as quottruth setsquot to which big data must be forcefitted These two ideas which all the participants agree came from the walled gardens may not be good ideas or at least not equally good for all partiesIf today39s traditional media companies are hobbled to a fuzzy picture of reality for targeting and measurement purposes while the walled gardens internally continue to benefit from deterministic targeting based on firstparty data and establish the most frequently requested target groups and make them quotcohortsquotamp160they will have a strong advantage going forwardThere is no cause for alarm however in that multiple forms of deterministic privacyprotected IDs are springing up advertisers continue to build their DTC databases and publishers continue to build theirs There is going to be no onesidedness favoring the walled gardensWe note from Standard Media Index representing the advertisers buying through the large agencies that the trend in CPMs for the walled gardens has been edging down although Adam and others have advised me that this is the opposite of what smaller advertisers have recently been experiencing especially in terms of Costs Per Lead which Adam says are up 50 to 100 for the smaller advertisersLowering of CPMs could mean that efficacy CPL or ROI has been declining possibly since the beginning of the removal of thirdparty cookies which Apple started in 2016 It could also mean that the large advertisers are becoming more sophisticated and using ROI data that reflects all the media and promotion stimuli those advertisers are using and to a large degree ignoring the walled garden reported ROIs which only take into account their own silo assuming credit for all the sales the brand made during the flight period as if no sales ever occur purely on a habitual basis or based on recommendations from nonadvertising sourcesThe war for control of information takes much worse forms in places like China where the government is jealous of what the local walled gardens have in the way of surveillanceDeterministic targeting is too important to let it slip away from the hands of some players based on lack of comprehensive awareness of the factors at play by legislators or anyone else I39m confident that our own industry associations will lead the way out of onesided scenarios into a world of Equitable Data Peace andamp160Privacy Other than the education process it39s one of the least challenging of our challengesAnd I don39t believe anyone is maneuvering the situation to their own advantage although it looks that way on the surface We all just get wrapped up in halfknowledge when situations become highly complex and technical The people I know who work for the FAANGs are just as ethical and wellintentioned as all my other colleaguesNevertheless in the pursuit of improvement who could be doing more of whatThe walled gardens idea is inherently quotselfishquot and ought not to be encouraged by advertisers or to echo Tracey Scheppach quotFree The Dataquot The people who truly own the data are the consumers The advertisers who pay for media ought not be making others smarter with data the advertisers paid for Pouring money into media that give themselves their own report card was never ceded to be a best practice by any industry leader in history Hiding behind excessively blunt and misguided privacy protection practices needs to be cured by a rapid increase in the sophistication of regulatorsInvestment in piloting every promising idea the industry has needs to be escalated in priorityThe ARF with partners Central Control 605 and Bill Harvey Consulting created an education program around random control experiments That included a blueprint for using the Intent to Treat Factorial Design that can scientifically measure the ROI on incremental sales of each combination of media types without modeling The walled gardens cannot stop the buy side from finding out the truth about what the true ROI is of every media type and every combination Ultimately serious businesspeople do find out what they are really getting for their money It takes time but in the new environment in which we are all to some extent direct marketers the feedback loop from reality will ultimately supervene leading to ROI and Consumer Lifetime Value CLV driven decisioning The cheapest media will be shown in most cases to be the lowest ROI and lowest brand equity producing media There is no free lunchClick the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillagecomMyersBizNet

SUBSCRIBE FOR FREE MEDIAVILLAGE CONTENT | BECOME A THOUGHT LEADERSHIP CONTRIBUTOR

Data Wars: Claim Jumpers Monetize What Consumers Own

Author

Publish date

Channel

Bill Harvey

SUBSCRIBE FOR FREE MEDIAVILLAGE CONTENT | BECOME A THOUGHT LEADERSHIP CONTRIBUTOR

Data Wars: Claim Jumpers Monetize What Consumers Own

Enjoying This Commentary? There's More to Love

Bill Harvey

TAGS:

Cookies