Tackling Marketing's Dirty Little Secret: Consumer Data
Three key steps to cleaning up dirty data
PARTNER CONTENT
Data providers have long promised marketers accurate consumer data at scale. But for all the hype of being able to provide enough names to develop and target a desired audience with massive reach, it seems most providers are missing the mark. In fact, when it comes to the current state of consumer data, marketers have a real problem on their hands: It's dirty, messy, confusing, and just plain bad.
In trying to effectively target the right audiences, marketers are forced to make some costly trade-offs and run the risk of embarrassing misfires and wasted media spend.
Just How Dirty Is Consumer Data?
A recent report from Deloitte titled "Predictably Inaccurate: The prevalence and perils of bad big data," reveals just how inaccurate the data from third-party data providers and aggregators can be. As part of the research, Deloitte asked consumers to review information about themselves that was pulled from a leading consumer data broker. Overall, only 29 percent of the data was reported as being more than 50 percent accurate.
Additionally, the report found 59 percent of consumers found their demographic data to be only at least 50 percent accurate; this includes seemingly easily available data points such as age, gender, income, and marital status.
FIGURE 1
How Accurate Is Third-Party Date?
Consumers in different categories were asked to assess the accuracy of their information found in a third-party database. Most determined the data was inaccurate.
To assess just how bad these findings are, Resonate tried its own experiment, looking up an employee's consumer profile in the databases of 12 different data providers to see how the findings compare to Deloitte's research. Resonate found an average accuracy rate among the 12 databases of 30 percent. Marketers would have better luck flipping a coin!
How Did Consumer Data Get So Dirty?
There's no shortage of consumer data or data vendors, but there is a shortage of standardized data curation, governance, and auditing. As a result, consumer data is plagued with human errors, collection errors, and modeling errors. To make matters worse, there are a number of compounding factors:
- Missed casual relationships between data points
- Data sets that rely solely on self-reported data versus actual behavior
- Incorrect inferences about consumers' interests
- Use of biased sample populations
- Consumer data collected at a household level versus an individual level
- Faulty data models with false assumptions
Despite these challenges, consumers are unrelenting in their desire for highly personalized experiences. Consumer data provides some of the most vital and basic pieces of information that marketers rely on when creating relevant messaging and targeting. Using inaccurate data can risk a brand's relevance, reputation, credibility, and loyalty.
While much of the responsibility for dirty data rests with vendors, it's due time marketers take responsibility for understanding the harmful effects bad data has on their strategies and make it a priority to choose the right data partners.
Finding that partner can be tricky. Here are three key steps to take before making a decision.
1. Dig Deep On Methodology
This point can't be stressed enough. Ultimately the relative success (or failure) of a strategy and campaign comes down to the quality of the data. If one's data provider is hesitant to answer any of the following questions, or gives the run around, then buyer beware.
- Where does the data come from? It's important to know how the data is collected and what the sources are. Customer surveys, data from cookies, or a combination of both? Is it proprietary, third-party owned, or an aggregated list? In Resonate's experience, the vast majority of data providers do not organically generate the data they sell. In fact, most license information to each other or pull together databases of 50 to 90 sources. A data provider that uses multiple sources opens the door to increased inaccuracy rates. The result is a plague of inconsistent and confusing data, embarrassing campaign missteps, and a trail of frustrated marketers.
- Is it contextual? Folks are hot to trot for "behavioral data" (i.e., knowing not just who the customers are, but what they are doing), but without the proper context, it can be highly misleading. When looking at behavioral data alone, versus applying a layer of context (e.g., demographics plus additional online/offline behaviors), marketers' data will be prone to incorrect inferences and false data points that will ultimately tank their targeting accuracy rates.
- How recent is it? In the race to perfecting one-to-one customer experiences, real-time data and insights are essential. Extensive market research, in-depth personas, and 360-degree customer profiles are great, but with the evolving consumer and increasingly competitive marketing ecosystem, marketers can't be left waiting months or even weeks for data.
2. Get Your Hands Dirty
No matter what promises of accuracy or grandiose scale a data provider may claim, before using the data to guide decisions and marketing strategies, it's crucial for marketers to test it for themselves.
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To assess the accuracy of a data provider's information, marketers should ask to see their own personal data in the vendor's files. If the test draws questionable conclusions, how could it accurately identify a target audience?
3. Measure What Really Matters
It's easy to look at results of an ad campaign and get excited over deliverability and click-through rates, but marketers shouldn't stop there. To really know if the data is working, marketers need to be able to track at the individual level in order to optimize the creative and the messaging to replicate for success.
Exactly who are campaigns reaching? Is it the desired audience? Are there new or additional audiences a brand is missing out on? Those are the insights a data provider should be giving to its clients. Otherwise, how can a marketer know if the audience she paid for is the one she's really getting?
Get Started
As the marketing and consumer-insight keepers of the organization, marketers need to tackle this dirty data problem head on, and turn it from a "should fix" to a "must fix." It's time to challenge presumptions, to question data partners while holding them to a higher standard, and to demand greater transparency and accountability.
If the answers don't pass the smell test, marketers should walk away: Irrelevant messaging, disengaged audiences, wasted campaign dollars — the risks and potential damage from dirty data are just too great to ignore.
Andrea Puhak is the director of content at Resonate. You can email her at andrea.puhak@resonate.com.