Why data sharing could be good for online publishers

CodeThere are certain factors in marketing that everyone knows are important – but somehow they never quite seem to reach their potential.  Mobile is one.  Every year for the past 15 years has been named ‘The Year of Mobile’!  And yet mobile marketing is still a tiny part of most marketers’ thinking.  It’s the same with data.

Everyone is talking about how they can manipulate it, change it and turn it into something amazing that will boost response and create the conversions marketers need.  However, in reality, many marketers seem to be much better at talking the talk than at actually turning data nuggets into gold.

Having worked in data for many years before moving into digital, I know that there are three killer variables  that drive data and our ability to make the most of it: ‘Recency’ (how recently did someone do something), ‘Frequency ‘ (how often do they do that thing) and ‘Monetary Value’.  These are known affectionately as RFM data to data buffs.  Direct marketers have known about the power of RFM for years, but digital marketers have been slower to understand how important this data is.

Take Tesco Clubcard, for instance – the single biggest user of data in the UK for marketing purposes, collecting trillions of terabytes of data on millions of customers.  They know about every item purchased by every household that is a Clubcard holder, when they last bought it, how often they buy it and the value of that purchase too.  This incredible consumer insight has been at the heart of everything Tesco have done for years and provided them with a competitive advantage for a long time.

Then compare this to publisher websites which host the majority of online ads in the growing digital advertising marketplace.  Most of these may be able to derive information from each individual visit – but they are unable to track how often people visit their site.  Unfortunately, the knowledge you can garner from one single visit is small and pretty insignificant when it comes to creating the reach, volume and granularity of data required to really understand consumer behaviour and make informed decisions.

So what data do publishers need, and how can they create real value from their data?  I believe the solution is very simple: collaboration.

Publishers need to pool their data with other publishers, effectively creating a Publisher Data Consortium, to develop an enhanced, holistic view of the consumer with data combined from all their interactions across the syndicate member websites.

Why?  Because this will enable publishers to create their own, multi-dimensional ‘RFM’ data.  Through the application of in-depth analysis and intelligence it would be possible to identify the key variables across the pooled data that make a difference to online advertising results.  These variables would form the basis of meaningful consumer segmentation that could be applied to individual publisher databases so they can provide their advertisers with heightened levels of targeting to improve the effectiveness of their online advertising.

Clearly this would be great for the advertiser, but for the publisher it would make it possible to build greater value from their own data by creating more valuable prospects across their inventory that could be charged at a premium to advertisers.  Not only that, a consortium should also offer a flexible reward structure which would remunerate all participating publishers according to the volume, quality and use of their data within the syndicated group – helping to build additional value from the data by turning it into a corporate asset.

Sharing data with companies that you also view as your competitors may sound like a dangerous strategy but, done through an impartial third party company, like Zodiak Advertising , that is fully data compliant and has the right safeguards in place, it makes tremendous sense.  The data consortium approach has been used successfully in a number of other sectors, such as ecommerce, where it has created a strong data resource that has built tangible value from the data amongst the participants.

A clear value proposition would be required to provide all consortium members with an unambiguous understanding of what aspects of their data could be used and how – with transparent parameters being agreed such as, for example, not being allowed to directly target competitors’ customers and keeping raw data strictly siloed.

It may seem like a leap of faith to some but this would be a pragmatic solution to a thorny problem – after all, no publisher can believe that their readers are theirs alone.  By embracing this fact they can turn consumer polygamy to their advantage – creating a platform for better targeted, more effective online advertising that can make them more money.  Plus, the enhanced relevance will also benefit the most important participant in digital advertising: the consumer.

All I can say is, watch this space.

Donald Hamilton is Managing Director – UK at Zodiak Advertising.