The Current State of Data | Industry Insights | All MKC Content | ANA

The Current State of Data

An interview with Tom Benton of the ANA’s New Data, Measurement, and Analytics Division

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The ANA

Data has always provided the underpinning for good marketing. But as data storage and analysis tools have evolved from Rolodexes and file folders to hard drives and CRMs, the challenges — and opportunities — that data presents to marketers have increased exponentially.

In response, the associations that represent the industry have evolved to keep pace as well. In 2016, the Direct Marketing Association changed its name to the Data & Marketing Association (DMA) and expanded to serve a broader community encompassing the entire data, marketing, media, agency, and technology ecosystem. This year, in a bid to provide additional resources and more opportunities around data to its industry members, the ANA acquired the DMA, which will serve as a new ANA division.

As members of both organizations come together under what's now the largest association in the U.S. dedicated to the marketing industry, we caught up with DMA CEO Tom Benton, now the group EVP of the ANA's Data, Measurement, and Analytics Division, to get his thoughts on the current state of data in the marketing industry.

 

Q. From a top-down perspective, what are the most significant data-driven changes taking place in marketing?

Personalization, customer expectations, and marketing investment attribution. Customers expect personalization, and they demand value in exchange for their data. Marketers are competing to use the latest technology and best data practices to develop personalized and better customer experiences. Today, individual customers use a broad range of platforms and channels across an increasing number of connected devices. This creates a challenge for marketers seeking to efficiently deliver value to individual customers across those devices, platforms, and channels. It also creates marketing investment attribution challenges. Point-of-sale does not necessarily indicate which marketing campaign drove the sale, leaving marketers pondering how best to invest their marketing dollars to efficiently deliver value to customers.

 

Q. What strategic and operational challenges are these changes raising?

Just about every organization has at least one database, and databases are growing fast. Every responsible marketer knows that foremost it is critical that data be handled respectfully and securely. Additionally, we want to ensure that bad actors are identified and stopped. This year we will begin enforcing the Data Standards 2.0 module that is part of our industry's Guidelines for Ethical Business Practices. Several DMA members from across the advertising and marketing ecosystem spent several months developing these guidelines that incorporate important changes regarding new technology and techniques.

In addition to the responsible use and storage of data, transforming data into actionable insight requires efficient data management. Marketing data is abundant but, too often, still siloed, which limits the insights that can be drawn from it. A recent DMA study in partnership with the IAB found that firms spent $20 billion on third-party data alone. That data drives a tremendous amount of value, especially for marketers who don't have large first-party databases. More than half of that $20 billion was invested in technology and processes designed to organize the data for actionable insight. As part of this process, companies are wrestling with organizational challenges to eliminate data silos and departmental inefficiencies. In fact, 59 percent of marketers surveyed said that breaking down organizational silos would be the most important step their businesses could take to drive growth and better customer connections. Becoming a truly data-informed organization is the big operational challenge, and it must be met by tackling the internal culture of silos.

 

Q. What's the upside of a data-driven marketing world in terms of new opportunities?

Data-driven marketing continues to power a flourishing digital and offline economy and is ultimately a force for good. By creating a lower barrier to entry for small- and medium-sized businesses to reach niche customer segments, data has helped businesses build connections with their customers, resulting in increased relevancy of advertising coupled with increased value and savings for customers. Consumers rely on digital services in their day-to-day lives, and advertising on social media and digital platforms funds those services.

On the horizon, we see augmented intelligence driving advances and sophistication that will allow marketers to come closer to achieving the kind of one-to-one relationships that customers have grown to expect. More than 70 percent of marketers say their investments are driven by customer expectations of more personalized and relevant brand interactions. These are incredible upsides, as technology and process improvements offer better ways to deliver value to customers. But we must also be mindful to continuously evolve our self-regulatory guidelines to keep pace with these advancements — and we must be vigilant in ferreting out bad actors by enforcing those guidelines.

 

Q. Data's been in the news a lot lately, often cast in a negative light. What should marketers be learning from those stories?

I think it's important to note that many organizations of all sizes, but particularly small- and medium-sized businesses, rely on the responsible and secure use of third-party data to attract and provide value to consumers. There are many legitimate and responsible third-party data providers that serve an important role in helping marketers deliver value to individuals. Facebook's controversial security issues had nothing to do with these organizations.

Responsible, data-informed marketers know it is imperative to respect and secure the data that customers entrust them with. Transparency is essential, and choice must be made available. Once that choice is exercised, marketers are required to respect that choice. Data-driven marketers seek to deliver value via high-quality customer experiences through the establishment of one-to-one customer relationships based on truth, results, and trust.

"We need to send a strong message that entities that use fraud to obtain and use data for nefarious purposes simply will not be tolerated in our industry."

For more than six decades, the DMA and its members have developed and enforced industry self-regulation to help companies market responsibly and provide consumers an avenue to report bad actors. These guidelines are based on the input of industry experts who are nimbler and better-informed than federal and state regulators are. The guidelines are continually updated, keeping pace with industry innovation. That's simply not possible with state or federal regulation. However, we coordinate closely with the appropriate governing bodies, and if marketers delay in correcting inappropriate behavior, then we often work with the regulators (including the FTC [U.S. Federal Trade Commission]) to hold bad actors accountable.

In the end, marketers need to play an active role in calling out those bad actors who behave unethically and violate customer trust. We need to send a strong message that entities that use fraud to obtain and use data for nefarious purposes simply will not be tolerated in our industry.

 

Q. How big an issue is the EU's General Data Protection Regulation for U.S. marketers, and how should they be responding to it?

The GDPR is not just a European regulation. It governs data associated with European residents, including citizens of other countries who reside in the EU. Therefore, any company that's collecting data such as email without also collecting residential information may be at risk of violating the GDPR.

There has been a lack of awareness here in the U.S., particularly for companies that don't do business or have customers in the EU. Marketers need to make sure they are collaborating with their legal counsel … and building the systems needed to come into compliance.

 

Q. What do factors such as the Facebook-Cambridge Analytica situation and the GDPR portend for the marketing regulatory climate in the U.S.?

The U.S. is likely going to see constriction regarding the use of data. Poorly written initiatives in California and Vermont are already seeking to limit how marketers may utilize data to improve customer experiences. This is a shame, since small- and medium-sized businesses — and consumers themselves — will likely have the most to lose.

Regulators continue to look at the marketing industry's use of data, as they have been doing in recent years, but I'm confident that within our membership they will find a group of marketers that acts responsibly, with the best interests of customers in mind, and with a steady eye toward security and responsibility. Our industry self-regulation plays a key role here, by demonstrating that the industry takes ethics and responsibility seriously.

Companies must also be willing to demonstrate to regulators and legislators how they follow these and other guidelines. By being open and transparent about our how data improves customer experience and drives value, we can reassure the public that our methods are ethical, and that data-driven marketing provides a positive benefit to our economy.

 

Q. Given current trends in data, how prepared are marketers to deal with what lies ahead?

Customers are moving faster than marketers today. We must always keep the customer experience and the welfare of the customer front and center. The industry is constantly changing, evolving, and innovating. The volume and velocity of data across multiple channels and devices today is exponentially more challenging than it was 10 to 15 years ago, pre-smartphone. That's a significant challenge, and we must continue to come together and develop solutions that advance the entire industry while keeping responsibility and our customers top-of-mind. Associations play a critical role in organizing efforts to address these challenges, creating solutions, and then raising awareness across the entire marketing industry through communication and education.

 

 

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