Digital captured 72 cents of every new ad dollar in 2016, compared with TV’s 21 cents, according to GroupM’s Interaction report. In 2017, the report estimated, the ratio will be 77:17.
But as digital becomes ubiquitous, so do concerns around data and compliance in a totally connected world.
2016 “was an alarming year for the theft of personal information through data breaches,” the report reads. “While on the face of it, these hacks have nothing to do with advertising data … they try the patience of a weary public, who associate all types of data collection with something that could imperil their internet security.”
Rob Norman, chief digital officer at GroupM and author of the report, spoke with AdExchanger.
AdExchanger: How will global privacy law change this year?
ROB NORMAN: If the most draconian privacy legislation goes through [in Europe], the use of cookies and other forms of profiling are likely to be severely comprised. People are getting excited about legislating against the use of second- or third-party data and putting all the benefit of data usage to the first-party data owner. Yet all of the data breaches, whether from retailers, credit card companies or Yahoo, have been from people with owned and operated first-party data.
As far as I know, there is no example of people using third-party data that has caused any harm to the consumer. I’m concerned we may be entering a situation where the market is lopsided in the interest of protecting people, when the people it’s trying to protect them from haven’t caused a problem in the first place.
If a consumer opt-in is required for targeting, how will that change the way you work with clients?
However high the walls of the garden go, we are always going to be in the business of cross-channel allocation. [Clients need] someone in the middle to aggregate the audience and the opportunity, and at the same time separate the opportunity and the audience, to get the greatest value.
We believe that we need a single organizational structure and technology road map to collect data in a privacy-compliant way and deploy that data, whether directly with inventory partners or by parceling it up and tossing it over a walled garden.
We’ll still treat our efforts of collecting, cleansing and analyzing privacy-safe data in the same way. The way we deploy it will be subject to the privacy and security policies of the people we’re doing business with, some of which will be open and some of which will be closed.
Would an opt-in requirement make walled gardens more powerful?
Consumers have already done a macro opt-in [on platforms]. By accepting their terms of service, they have opted in to targeted advertising, period. If one group of people has a persistent opt-in and another group of people doesn’t, the fortune will favor the one that has it.
The report floats the idea that some advertisers may be at “peak data.” What does that mean?
Some people are overwhelmed by the data opportunity and, actually, it’s less of an opportunity for them than they may be led to think.
If you make shampoo that works for all kinds of hair, your need for very finely segmented data is quite low. If you make shampoo that only works for curly hair, your need for data is somewhat greater. If you make shampoo that works for curly hair when its thinning and people are losing it, then it’s segmented further still.
Depending on what you make and how much you know about your consumer and the points of distribution, there’s a determinant of how much data you require. Sometimes people that sell things [like] shampoo that works for everyone are being overpersuaded to fall too far down the data rabbit hole. When Procter & Gamble made comments about backing off with finer segmentation on Facebook last year, the scenario I just described is relevant.
Are marketers becoming more comfortable letting their agencies handle “high-quality data”?
The data issue with clients has always been over ownership, and clients have increasingly begun to invest in data management platforms. Their goal is to allow a sufficiency of data to end up in a shared space between them and the agency or them and the media seller. They’re just concerned that they carry on owning it.
This interview has been edited and condensed.
