Why consumer data is the new oil

Why consumer data is the new oil

Why consumer data is the new oil
The Holy Grail of marketing in 2016 is arguably the well-worn “right consumer on the right device at the right moment” — and it’s certainly a valid aim.

But as the scope of data collected about consumers expands, the marketing stakes get higher. In other words, we are barreling toward a future in which right consumer/device/moment will no longer be adequate. Instead, savvy marketers will use consumer data to anticipate needs and give consumers what they want before they know that’s what they want. And that means the bar for consumer expectations will go higher, too.

What’s more, in many cases, marketers will have to supplement their own internal data with data aggregated by third parties in order to gain a more comprehensive view and reach that anticipatory point. And that, in turn, means third parties with data will find themselves in very powerful positions.

Whether they realize it or not, consumers share data with — and are tracked by — familiar names like Facebook, as well as less familiar parties like Acxiom, and this data is used to make predictions about them and to serve ads accordingly, said Aaron Shapiro, CEO of digital agency Huge.

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And, in the short term, this has had the theoretical benefit of delivering ads consumers are more likely to find relevant. Right consumer, right?

But here’s the thing — the amount of data collected on consumers is only going to increase and the pace certainly isn’t going to slow down in the foreseeable future.

In fact, RP Kumar, executive vice president and director of international research, insights and planning at marketing agency Ketchum, said the amount of data and the pace at which it is collected will accelerate exponentially.

Michael Horn, managing director of data science at Huge, agreed, pointing to applications around image and video recognition, as well as voice interfaces and geospatial data streams that are rich and computationally intensive.

“All of these new AI applications are data-hungry,” Horn added.

And the result is something of a double-edged sword. If brands and marketers are able to zero in on consumers who want to hear from them with offers consumers actually want, advertising may be less likely to elicit groans and eye rolls ever again. Consumers may further benefit from brands that know them and their preferences and can offer products and services at the right moment without consumers having to do anything at all. And this futuristic scenario isn’t much of a leap beyond realizing you’re out of diapers and pressing an Amazon Dash button.

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Kumar pointed to the 2002 Tom Cruise movie Minority Report in which data becomes so ubiquitous, law enforcement can predict who will commit crimes before citizens break the law, posing ethical questions about privacy and boundaries.

“If I’m passing by Starbucks and the proximity of my phone makes a coffee for me, how creepy is that? That someone or some machine is keeping tabs on me,” Kumar said.

But, regardless, it’s coming. Although, to be fair, in the ideal future scenario, coffee will only be made for those nearby consumers who want it.

As it stands, marketers already have access to tons of data from first, second and third parties, said Chris Albert, senior vice president and director of digital/social research and analytics at Ketchum.

Here’s a quick primer on how that breaks down:

The classic example of first party data is a sales database with consumer names and contact information, Horn said.

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“Brands have a near monopoly on that kind of data,” he added.

But it also includes purchases and age and often comes from efforts like loyalty programs and reward systems, added John Stewart, senior vice president of strategy and analysis at marketing and technology agency DigitasLBi.

Per Stewart, first party data is best because a brand owns it and has access to, say, every purchase made at a particular retailer with a given credit card.

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