A substantial amount of wasted spend occurs from not only bot traffic, but also when spend does not reach the intended characteristics, shares Chris Matty, co-founder and chief revenue officer at Versium. While data provides great value to marketing, it has a myriad of problems that must be addressed to yield the most benefit from an advertising perspective.Â
To be an effective marketer in today’s world, you need to be “data-driven,†but it is important to utilize all the various data technology tools to yield the best results and ROI from your spend. Otherwise, you are wasting ad dollars and lowering your company’s overall potential profitability.
The internet has evolved into an extremely powerful advertising tool for marketers. A big factor contributing to this growing value to advertisers is the rich data that is generated in today’s connected world that can be used by marketers to understand people and to effectively reach them. But there is one big drawback to the existence of all this data. Data can be challenging to deal with, can have considerable errors or be fundamentally inaccurate. Â
Consider Proctor and Gamble – the company canceled over $200 million in digital advertising going through third-party ad platforms after it discovered that this spend was not reaching the right people, or in fact, was not reaching people at all! What they learned after extensive research is that not all web traffic is legitimate from an advertising perspective. Companies like Google and many others are constantly indexing websites using computer programs that read and collect data.Â
Worse yet, there are nefarious entities that create synthetic identities (fake email addresses not associated with a real person) to perform a variety of fraudulent activities, including driving web traffic to increase ad impressions. These computer-generated pageviews (where ads may appear) are otherwise known as robot or “bot†traffic. Studies suggestOpens a new window that between 36% and as high as 64% of internet traffic is attributed to computers instead of humans. When it comes to a $200 million media budget, that’s potentially over $100 million of wasted spend.Â
See More: Why Marketers Should Not Be Too Confident About Their Data Privacy
The Link Between Ads and Data
Historically, much of the media spend goes through third-party platforms that promise to target specific audiences with characteristics advertisers want to reach. For example, a high-end jewelry company wants to target high-net-worth individuals. An advertiser then bids on this traffic, assuming the targeting that is delivered via these “black box†ad platforms is accurate.Â
How does this happen? Third-party ad tech companies rely on household or individual attributes that define various characteristics, such as net worth, and map this to the identity data that is associated with browser pageviews. Identity data means data that identifies a person, such as an email, name, address, phone number or mobile ID. Once you confidently identify a person, you can link them to offline insights like demographics and purchase interests, and much more. This type of targeting has gone on for years prior to the internet via direct marketing through traditional mail, and there are a number of sources for demographic data that can be mapped to a household address.Â
Ultimately, this allows the internet’s vast volume of page view impressions to be associated with specific targeting characteristics through this linkage. This identity data is generated at a massive scale when people log in and provide their email, browse with their mobile device or submit an address for product delivery. Identity data can also be created by computer programs that simulate human behavior.Â
So, the fundamental question is – how good is all of this data and its linkage? Even real people provide false information or make data entry errors in website forms. While an email may be deterministically associated with web page views (factual), the mapping of email to a physical address and the associated household demographics might be probabilistic (i.e., modeled). If the underlying data is not formatted properly, not standardized, or fundamentally erroneous or is not generated by an actual person, the targeting accuracy can be substantially affected.
When P&G did their analysis, not only did they identify a substantial amount of wasted spend on bot traffic but also determined that much of the spend did not in fact reach the people with the characteristics intended. Social platforms like Facebook grew to tremendous value and captured a significant portion of the overall media spend because of their greater ability to demonstrate accurate deterministic targeting because of the insights they obtained from their users.
As the ad tech ecosystem evolved to address this issue, there was a shift toward activating first-party data or data owned by the advertiser, such as data gathered and residing in their CRM systems and marketing automation platforms, instead of the data residing in “black box†ad platforms. The activation of this first-party data provides advertisers with greater confidence that they are spending to reach the right audience because they can upload their identity data (i.e., email addresses and phone numbers) into these platforms.Â
How to Ensure that Data in the Systems Is Good?
Salesforce has stated, as have others, that as much as 50% of first-party data residing in companies’ various marketing databases is bad, outdated, and fraught with errors. I recently got an email with content and messaging that made it clear that the advertiser thinks that I still work at a company I worked at over 15 years ago! To err is to be human. However, manual data entry often leads to dirty data. This leads to substantial inefficiencies in activating first-party data and missed advertising opportunities.Â
See More: Are Data Clean Rooms the Future of CPG Advertising
So, while data provides great value to marketing, it has a myriad of problems that must be addressed to yield the most benefit from an advertising perspective. To be an effective marketer in today’s world, you need to be “data-driven,†but it is crucial to utilize all the various data technology tools to yield the best results and ROI from your spend. Otherwise, you are wasting ad dollars and lowering your company’s overall potential profitability. This applies to both digital, direct and virtually any marketing activities that utilize data.
Improve Your Data Value
Here are five things you can do to better utilize and improve the value of your data:
- Data hygiene tools: There are systems that can identify and fix data errors such as missing fields, improperly formatted addresses, phone numbers and emails.Â
- Identity validation: make sure the “people data†you have in your system is valid, up to date, and associated with a real person.Â
- Contact data validation: There are numerous email and address validation services that can help strip out bad or outdated data.
- Contact data appending: There are services that deliver additional contact points for the target audiences you want to reach. The average person in the U.S. has between 4 to 10 emails in various states of use. Some are not used to receive email messages, but rather to log into different environments. The more contact data a marketer has, the easier it is to “reach†target lists across all marketing channels.
- Insights data appending: Associate demographics and other insights to your first-party identity data.Â
Marketers who effectively use these tools can greatly improve their marketing efficiency and not have to worry that they are wasting media spend on advertising to the wrong people (or bots) due to bad data. Â
What steps have you taken to prevent and eliminate dirty data from your systems? Share with us on FacebookOpens a new window , TwitterOpens a new window , and LinkedInOpens a new window .
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