Let’s All Do More With Less

“Social Exchange” is a column focused on the evolving roles of social media in online advertising.

Today’s column is written by Andrew Pancer, Chief Operating Officer of Media6Degrees.

Data is one of today’s hottest industry topics, and managing it well will drive the future of online advertising. DSPs, ad networks, exchanges, and publishers are falling over themselves to harness their own and other people’s data and use it in new and interesting ways.

Scott Burke, VP Engineering of Yahoo, recently wrote for AdAge:  “It’s not about how much data you have, it’s what you do with it.” I could not agree more. The fact that most DSPs provide full-service solutions rather than a true trading-desk solution helps prove my point. If campaign execution was as simple as buying data and adding it to the mix, then there would be little need for full-service providers, regardless of client or agency talent. Intelligent use of data requires a mix of analytical thinkers, technologists, and learning systems that allow campaigns to improve over time based on the data being collected.

For an industry full of the world’s smartest technologists and marketers, we should be focused on doing more with less. Revolutionary targeting technology should be able to deliver significantly higher returns without having to amass ever larger arsenals of data.

What concerns me is that increasing amounts of data are being collected, but the additional technology layers do not yield results strong enough to justify its use. To the outside observer, it appears like we are collecting data for no other reason than to have more of it. We start to resemble “Big Brother.” Companies are collecting and selling data based on purchase intent, context-based behaviors, demographics, psychographics, and social interactions, just to name a few. Offline data is also starting to make its way online. When coupled with the right technology, any of these data types can be effective for targeting and for reaching a marketer’s objectives.

There is no one “silver bullet” solution that works for all campaigns. Demographics mixed with social data may work well with one campaign and help reduce wasted impressions. Purchase intent data is effective for reaching people at the bottom of the funnel. But we need to ask ourselves: How much incremental lift is this additional information really providing? I have seen case studies touting 2-3 times lift in conversions over basic demo and contextual targeting, along with increased CTRs. Is that the best we can do?

Due to the volume of data being collected, it’s no wonder that both the public and the government are watching the industry so closely. The future of online advertising depends on targeting and intelligent use of data. Consumers are smart enough to know that advertising supports free content. Targeting will allow the online ecosystem to grow and flourish. But we need to do this with the highest level of respect for consumer privacy.

I’d challenge the industry to take a more conservative path. Collecting and using data for the sake of data is not good for the marketer, the consumer, or the industry. Transparency efforts by the IAB, NAI, and Truste continue to move forward, and will have a profound impact on what consumers know about the data being collected for targeted ads. When that time comes, I would like them to be pleasantly surprised how little we actually know about them.

Let’s all do more with less.

Follow Andrew Pancer (@apancer) and AdExchanger.com (@adexchanger) on Twitter.