"Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Scott Garner, executive vice president and chief commercial officer at ADARA.
During a panel discussion over the summer, Marriott CEO Arne Sorenson described how his company is pitched in a war against tech giants such as Google and Facebook.
If his customer buys a hotel room with Marriott, they might have searched for the best price on Google or clicked on a Facebook ad to get there. The data trail left by that customer is then owned by the tech companies, even though the customer is Marriott’s from a commercial standpoint. With so much data to pull from across so many brands, Google and Facebook keep growing and learning more about customers who are transacting with individual brands.
This lopsided data scenario is a big reason why Arne and others feel they are at war. For brick-and-mortar brands, the interaction with their customer is their interaction. Data has value like any other good. A hotel wouldn’t let a customer bring a friend who crashes in the room next door for free. They don’t want Facebook and Google to crash without paying their fair share either.
Many brands have taken a back seat in the data war, throwing up their hands in defeat, rather than finding ways to battle back as Marriott is doing through loyalty. There is a better approach, where brands can still benefit from Facebook and Google’s scale and technology – after all, most brands rely heavily on these companies – without having to freely give up customer insights or value.
Redefined ‘data IP’
In media, a songwriter owns the rights to their song, an author owns the rights to their book, and an artist owns the rights to their painting. Someone who sees that painting online can’t make a copy and claim it as their own. A precedent is set in laws and contracts that have been tested in court.
Brands can argue that the same ownership should belong to transactions between the customer and the company.
For example, if a customer books a hotel stay with Marriott, that is a private transaction between those parties. A company like Google should not be allowed to scrape data from the customer’s email account for their Marriott hotel data without a more explicit agreement from the customer and the brand.
Use GDPR as a wake-up call
GDPR regulations require all companies that handle the data of EU citizens to collect the data after they have secured informed consent. Brands should use GDPR as an opportunity to reset what data the tech giants take and how.
Marriott gets informed consent automatically when a consumer books a night at a hotel because they are directly interacting. This causes brands to be very careful about how they collect and use customer data. It’s worth a candid conversation with companies like Facebook and Google to gauge whether the data they “infer” as consumers search, use apps, email and social media would pass muster under GDPR scrutiny.
Pushback from publishers caused Google to rejoin the conversation about limiting tags on publisher partner websites. Brands can also push back if they feel that Google or Facebook are not being treated appropriately under new regulation.
Brands can do a few other things to gain an edge. First, they can educate their consumers. For example, they can remind consumers to be data advocates to ensure their purchases aren’t being tracked by third parties without informed consent. They can remind customers that GDPR requires companies to delete customer data upon request. Brands can also be more selective about sharing data with big platforms to gain short-term revenue or scale instead of helping build long-term customer value.
Data is currency
Tech giants have an advantage over brands because they know the value of every data point and consider data an alternative form of currency.
In negotiating any new contract, it is the brand’s responsibility to understand the value of their customer data and use that information as leverage. Two different companies might value the same data point differently. For example, an airline might care only a little bit about which meal a customer picked on board, but that data might be very valuable to a food service company.
Brands should feel empowered to negotiate more directly with Google, Facebook and other tech giants about consumer data collection and use. Brands are customer experts and have a right to advocate for their customers, their relationship with those customers and the data that is generated during those relationships.