In the age of Artificial Intelligence (AI) and machine learning, most digital marketing is driven by data. And if it’s not, it should be.
Most prominently, audience data can allow marketers to create entire content strategies that are targeted and overall more effective.
Before contemporary data analytics came to be, advertising content was created simply by taking an educated guess at what would be most persuasive to consumers. In the technological age, however, masters in digital marketing are able to design marketing plans that are guaranteed to be more effective by data evidence.
Today, data is quite literally creating its own economy and has become increasingly more valuable and important for businesses.
According to the 2018 Winterberry Group Report, data assets accounted for over half of marketer spending in 2018 and took priority over tangible assets. More specifically, spending on dedicated identity data assets (audience data) grew by more than 50%. In addition to spending growth, marketers are also seeing the introduction of stricter data protection regulation.
So, what does this all mean for digital marketers and the current state of data usage?
A New Economy with New Solutions
Data has quickly become the mechanism for growth and change within economies on a global scale. It has the potential to be analyzed and traded at a higher value than many physical goods. Even Amazon uses mass transportation measures to ship containers full of precious data storage devices.
As technology improves, and more users find themselves online, digital marketers become more and more adept at processing data and leveraging it to their advantage. In fact, some firms are even beginning to offer services to users in exchange for personal data. By optimizing personal data collection methods, marketers are able to understand their target audience better than ever before. Combine all of these facts and it becomes easier to see the bigger picture of a global economy emerging based on data collection and trade.
This new form of power through knowledge is highly coveted as businesses seek to take unique measures to remain at the top of the game. Many newer companies based in technology, like the Uber app, find themselves in a powerful position because their business systems are already producing so much data. Having access to such a wealth of data on consumer behavior is a competitive advantage to any business’s digital strategy.
Companies that can provide their own data wells are the ones who do not have to outsource data collection or buy it off others. Many would consider data to be the “new asset class”. On the other hand, this mass data mining can prove problematic as businesses break down more privacy barriers.
Perhaps one of the most important forms of data for digital marketing strategy is audience data. This information about consumers helps companies identify audience members through various details about their demographics and online activities. Specific to eCommerce, this data can help merchants target their buyer personas more efficiently and effectively, and on a more personal level.
Audience data methods capture both structured and unstructured details about consumers. The information can range from details as simple as their email address, to something as complex as their preferences based on psychographic attributes. For instance, your online behavior can help marketers learn trends in your shopping preferences all the way down to your favorite shampoo scent or your go-to Starbucks order.
These days audience data can be what scares the average consumer most about the internet, but it can also make digital marketers and businesses the most successful. By being able to better understand their audience, marketers can provide more appropriate content and services that consumers may actually want. It also helps immensely when planning targeting strategy and audience segmentation.
At the end of the day, more detailed audience data means more effective media placement and thus more quality leads and conversions.
With these innovations in audience data collection, there has also been a bit of backlash from the public in the form of a recent wave of privacy concerns sweeping the globe. In an effort to protect users from overly intrusive data collection, legislators have begun to make moves towards greater online transparency.
The EU passed the GDPR (General Data Protection Regulation) in 2016 to further protect user privacy. Not surprisingly, it places a law on data privacy protection and prevents the export of personal data outside of the EU.
Following in the EU’s footsteps, the state of California recently passed the CCPA (California Consumer Privacy Act) which will go into effect in 2020. Since its passing, many California businesses have increased investments in technology infrastructures that will better support data security.
The CCPA will likely have a large ripple effect across the entire U.S. with the implementation of similar data regulation on both state and federal levels.
These major changes will undoubtedly affect the availability and usage of audience data nationally, and will pose a challenge to the current ways of digital marketing. Marketers will have to uphold a new standard of data quality in order to still be able to provide the same web browsing experience that consumers have come to rely on. On the flip side, the general data protection may also lead to increased trust and comfort on the consumer level.
The primary trends in this new wave of data regulation will involve consent and privacy. Most of the regulation is aimed at preventing unwanted profiling that has become common through tracking technology, like cookies.
The goal is complete transparency of purpose from the business side, and explicit consent from the consumer side. Businesses can use some of this to their advantage by adapting more trustworthy practices in the eyes of consumers.
But what does this mean for the day-to-day operations of digital marketers who rely on data?
First, businesses have already implemented new online Privacy Policies that address the needs of the GDPR. With this action, digital marketers are already on the path to adapting to new regulation that may pass.
In addition, many have already begun to embrace a more compliant method for digital targeting: contextual advertising. Contextual advertising is different from other types of profiling because it uses data about content that a user is viewing in real time. Rather than mine consumer profiles for behavioral data, it gives marketers insights on what their audience is viewing at a given moment.
Through contextual advertising, marketers can still bid for an ad position of high interest and get leads online. They can still use consumer insights about their content choices. In other words, there may need to be some adjustments to strategy, but it will not be the death of digital marketing as we know it.
Data will continue to reign supreme and grow in importance, perhaps just in a different way. As technology and regulation evolve, marketers will have to continuously adapt their strategies.
Audience data will still be the leading driver behind targeted campaigns, but the use of behavioral data will focus in more on real-time content consumption. Marketers will have to shift tactics to work without leveraging highly personal data, in addition to implementing stricter privacy policies that conform to new laws.
On the bright side, there are still many ways that digital marketers can utilize data, all while consumers are building trust in brands. The future looks optimistic for a healthier balance between consumer attitude on data privacy and success of online platforms.