Sometimes it’s hard to see the proverbial forest through the trees. So it is with data, which is easily the most [ab]used word and topic in marketing and media circles today. It is definitely a dense topic with lots of layers and applications, which often get conflated and misappropriated. My aim here is to shed light on it and peel back some of the layers of misinformation because data ultimately stands in service of better understanding, better targeting and better delivery of content.
Let’s start by dispensing with three myths: that all data is equally valuable, that owning your own is even better and that more data is inherently better. None are true, but those myths fuel some of the motivation behind the agency world’s rush to build up and centralize their respective data efforts. The encroachment of consultancies on the agency ecosystem presents a separate impetus to bulk up on data. After all, the Accentures and Deloittes bring their own data sets to the table. With so much data, we can’t help but drive growth, right?
In fact, the third myth may be the most egregious because the more data sets you pile on to solve any kind of marketing issue, the less valuable it all becomes. Conversely, 50 data sets aren’t better than the right five; there’s a distinctly diminished return on investment.
Think about it this way: Despite our ecosystem being awash in more data sets than ever, many brands continue to struggle. Look no further than the continual mediapalooza of media agency reviews clients keep demanding and the still-high rate of turnover among CMOs as clear indicators that answers haven’t yet been found. For the first time in modern marketing history, investment in brands is going down while GDP is going up. Brands are missing out due to lack of the right investment strategies.
Ironically, the promise of data was that we as an industry would use it to deliver more effectively and reorient media by being smarter about targeting, which would lead to growth—or at least efficiency—for the client. But that’s not happening. Instead, the industry is being pennywise but pound-foolish by spending too much on process. The reality is that around 60 percent of client media budgets get spent on data, as well as other elements such as technology, content, social, programmatic, etc., leaving only 40 percent of the budget to do 100 percent of the brand building.
Procter & Gamble’s marketing chief Marc Pritchard figured this out the hard way in the last 18 months and has been quite vocal about it. “We targeted too much, and we went too narrow,” Pritchard told The Wall Street Journal earlier this year. “And now we’re looking at: What is the best way to get the most reach but also the right precision?” In other words, too much data at too high a cost, too narrow a cast and too few consumers reached or even affected.
Meanwhile, the other holding companies are dropping billions of dollars on acquiring or building out wholly-owned data assets. IPG shelled out a whopping $2.3 billion to acquire Acxiom in July. That’s a lot of investment that needs to be made up in revenue, and it now puts the company squarely into the data selling business. We all know how it turned out for agencies when they got into selling inventory through the trading desk business.
Data holds an important place in the value we deliver for clients every day. Knowing how much and where to use it is the key to leveraging the media needed to drive brand growth.