I love getting deals.
Just the other day, I walked into my local Safeway grocery store and got $1.50 off a gallon of non-fat milk. I went with non-fat to offset the calories I ingested at the cheese & shrimp sample station Istumbled on prior to arriving at the dairy section. (I'm also down with free food.)
I got the discount on milk -- and a number of other items that day -- simply by trading some of my data with Safeway through their Club Card program. It's pretty simple. They get my home phone number, address, email address, and date of birth and I save money on stuff I buy.
This is a "value exchange" in its truest form. Safeway gets value out of my information, and I get value from them in return.
Let's put aside for a moment that I opted-in to this program. The fact is, I am very willing to grant Safeway access not only to information on who I am and where I live – both at home and on the internet – but I also allow them to see detailed information on my purchases, from milk to dog food to razors. I allow this to happen for two reasons:
1. I trust Safeway to not do anything with my data that would be a breach of that trust; and
2. I want to get something in return when I shop there.
People have the right to expect the same from businesses they connect with during their digital day. More and more people are seeing that the digital data they generate is worth something. Moreover, most of them appear quite willing to trade it online with brands they trust.
According to a recently released book called "Sexy Little Numbers" by Dimitri Maex. Managing Director of OgilvyOne New York, 72 percent of US consumers surveyed said they were willing to share data if they receive fair value in exchange ( Consumers and Data). Whether this comes in the form of cash, enhanced services or special offers, people seem pretty hip to the idea of "getting something for something."
This is great news for any business that wants to build a better, stronger, more trusting relationship with people online. And what business doesn't?
This does beg a question, however. If seven in 10 people in the US are so willing to share their data online in exchange for something of value – what does that do to the commonly held belief that people are nervous as hell about their online privacy?
Honestly, I don't know, but it could mean that people are as concerned about getting value in exchange for their data as they are worried about their privacy being invaded. There are mixed signals on this topic.
In contrast to Maex's research, the Pew Internet & American Life project ( Pew Study) found that 68% of people surveyed were "not OK" with targeted advertising because they don't like their online behavior tracked and analyzed. While the two studies may seem at odds with one another, it may actually reflect an evolution of how people are viewing the issue of online data and privacy.
I suspect that if you merged the universes of both these surveys, people might say the following:
"Yes, I have concerns about my online privacy, but I also like the idea of trading my data for something of value with brands I trust."
I think that is a perfectly reasonable position.
Now, let's get back to the notion of opting in to Safeway's Club Card. I had the option to decline to participate in their rewards program, but I chose instead to opt-in. I agreed to their terms, including this passage:
... We record information regarding the purchases made with your Safeway Club Card to send you special offers, personally tailored coupons, and other information, provided you give us complete and accurate information on this application. If you DO NOT wish to receive special offers, coupons, or other information, please check the box below. However, if you check this box, you will not be eligible to receive any special programs or offers for which you might otherwise qualify through your use of your Safeway Club Card…
Like I said, I enjoy deals, so I was more than happy to agree to these terms. Now, this is very different than if Safeway started examining my purchases and put personalized offers in front of me without my consent.
Let's apply this regimen to the digital ad ecosystem.
I am in no way advocating an immediate and exclusively "opt-in" consumer experience for all digital advertising. What I am suggesting, however, is that we are inexorably moving to a world where opt-in becomes the holy grail of digital impressions. A world where consumers expect (as they should) commensurate value for their data. Where an opt-in impression is worth a lot more to advertisers and agencies than is a run of the mill non-opted-in impression. Where advertising ceases being something that is pushed at consumers and instead becomes something that consumers pull into their world.
In a speech at the IAB's 2011 Annual Leadership Conference, Microsoft Advertising's Rik van der Kooi put it this way:
"…Imagine a world where consumers willingly share data with advertisers, aggregators, publishers and agencies in exchange for real value…Is there any question that this data would be more complete and provide a better platform to provide exactly the kind of advertising that would appeal to the user and lead to more transactions…?"
Van der Kooi went on to describe how this might lead to a new taxonomy in digital ad impressions.
1. A basic impression with little or no targeting dimension attached to it…aka "impressions by the ton";
2. A targeted impression -- aggregated, non-personally identifiable cookie-based data that allows advertisers and agencies to more precisely target qualified audiences…worth, say, four times that of a basic impression; and
3. A relationship impression,where ad space is re-cast as publisher-provided space for commercial engagement between people and businesses where there is mutual interest…This might be 10 times more valuable than a basic impression.
This notion of a tiered system of consumer engagement, from no data sharing on one end of the spectrum, to highly customized data sharing on the other end would be a proverbial win-win for our industry.
For consumers who want to protect their privacy at all costs, they could have it – but it would come at the expense of relevant advertising that might otherwise be of interest to them.
For advertisers, they would be able to connect with consumers who want deeper engagement and not annoy other people with advertising that is irrelevant.
And for publishers and companies who aggregate and sell data, they could develop supply-side pricing models that match the value of impressions more closely to their actual worth and capture more value for those impressions that exist higher up the food chain (i.e. opted-in relationship impressions).
Finally, this might be reason enough to address concerns that could lead to overly broad government regulation of our industry.
We all talk about the "value exchange" … shouldn't we run, not walk to this new world? Sounds like a pretty good deal to me.
Tom Phillips is Senior Director of Communications for Microsoft Advertising. In this capacity, Tom has global responsibility for external communications and Public Relations for the Microsoft Advertising Business Group (MSA BG). Follow him on Twitter at @tphillips59.
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