Starting Wednesday, the Berlin-based mobile data exchange adsquare will offer refunds on the cost of data if the total delivery for a given campaign doesn’t fall within an advertiser’s declared goals.
The guarantee helps build marketer confidence in a world where quality mobile data is in short supply and most of the good stuff lives behind garden walls. There’s no easy way for marketers to know if the third-party data they’ve bought is good or not until after the fact.
Although lots of providers “claim to have good quality and solid reach,” said Gunnar Neumann, director of corporate buying at Twentyfive, P&G’s media agency in German-speaking markets, “the only way for marketers to prove out the value of a data set one way or the other is to test it out and see if it works – and that causes a lot of waste and inefficiency.”
Adsquare aggregates verified first-party data through direct partnerships with app publishers to create a truth set of roughly 325 million profiles that it uses to validate the accuracy and reach of third-party demographic data in its exchange.
Clients are charged on a CPM basis for the data, which they can then activate through their demand-side platform of choice. To start, validated segments are available in five markets: the US, UK, France, Germany and Italy.
Adsquare claims to exceed industry benchmarks when compared with audience measurement through Nielsen’s Digital Ad Ratings (DAR).
For example, DAR pegs the average on-target percentage for people between ages 18 to 49 at 64% for mobile campaigns in the US and Europe. That means an advertiser looking to reach that age group on mobile can only be assured that 64% of impressions will likely hit the desired audience. Adsquare says it’s able to hit around 80% delivery for that same demographic segment.
“Nielsen benchmarks can be astoundingly low,” said Ted Smith, Adsquare’s VP of sales in the US. “What we’re doing here is giving advertisers the ability to really project reach and performance against an audience.”
Greater transparency into data quality is a compelling proposition for marketers increasingly reluctant to put up with the buyer-beware doctrine, said Melissa Grady, an independent marketing consultant who spent nearly five years as VP of digital acquisition and measurement at MetLife.
Poor third-party data quality leaves a bad taste in an advertiser’s mouth, she said. No brand wants to be called out for sending a “Welcome to Manhood” first-razor promotion kit intended for 18-year-old men to 50-year-old women, for example.
“Marketers are always a little suspicious of third-party data and it often doesn’t work that well, and even when it does, it’s hard to determine why,” Grady said. “But as we get partners with access to wider pools of first-party data – which marketers trust more – using that as a validation for data we have some concerns about will really open up the marketplace.”
Third-party data quality is so shaky because the ecosystem is a mess. More than half the age data in mobile exchanges – 60% – is inaccurate, according to Sprint subsidiary Pinsight Media.
It’s usually unclear how third-party data on the open exchange, mobile or otherwise, is collected. There’s also no consistency in how it’s displayed and no information on how fresh it is.
It doesn’t help either that many advertisers are racing to the bottom at high speed in their ongoing quest for the lowest price, ignoring the inherent trade-off between cost, quality and scale.
“When you get right down to it, marketers could be wasting 50% of their campaign dollars, and given the expense of bidding on presumably targeted inventory, they could be wasting even more,” Smith said. “At that point, you might as well buy cheaper inventory and truly just do [run of site] than buy what’s perceived to be targeted inventory, which is more expensive, and you have to pay for data.”
But turning to Facebook and other first-party data bastions for accuracy isn’t the only answer, said Neumann, which is partly why Twentyfive recently started testing adsquare’s validated demographics tool.
“Only a few segment providers have the best access to do an ideal calibration, for example, Facebook,” Neumann said. “[But] we aim to utilize these [validated] segments to further reduce dependence on walled garden infrastructures and ensure high-quality age and gender delivery for our client’s brands.”