How the data economy is disrupting marketing
I first wrote this to kick off Citizenme’s newsletter about disruption and innovation in the data economy. This is the first issue about how data is disrupting marketing. If you like it you can subscribe here.
The digital and data driven economy is reshaping all areas of the marketing wheel from market research to advertising. This is creating huge opportunities for businesses to innovate and establish stronger relationships with their customers.
What consumers are up to?
The number of ad blockers installed globally is now 615 million worldwide on both mobile and desktop (that’s almost 10x the population of the UK!). The biggest drivers of installing an ad blocker, according to a survey of US internet users, is security and interruption. The concern around data security is reinforced by another study showing 84% of consumers are concerned about the security of their personally identifiable information. Interestingly, Millennials are more worried than those aged over 35. Given Millennials are driving digital and technology adoption, it is vital for brands to tackle these issues head on.
A question I get a lot is; “how do attitudes stated in surveys impact real behaviour”. In the chart below I’ve hacked together data from two separate studies to give us a rough idea.
There is a correlation at an aggregated country level. Those countries more willing to share their personal information (for decent benefits) are less likely to have installed an ad blocker. So attitudes are mapping well against behaviours in the advertising industry. I’m convinced there’s a huge opportunity here for brands to gain competitive advantage by improving the value exchange for consumers sharing their personal information.
Digital advertising has big structural issues. Internet users are blocking them because they’re seen as an interruption rather than providing value. Further to that, Google blocked 1.7bn bad ads in 2016, twice as many as they blocked in 2015.
This in part is adding to the woes of UK publishers, who are facing increasingly rockier times. Falling circulation, increased ad blocking, falling ad spend and fake news is all taking its toll. Can the news industry find a business model not reliant on advertising? It sounds like Medium are looking for one. Founder and CEO, Ev Williams recently wrote:
“…it’s clear that the broken system is ad-driven media on the internet. It simply doesn’t serve people. In fact, it’s not designed to. The vast majority of articles, videos, and other “content” we all consume on a daily basis is paid for — directly or indirectly — by corporations who are funding it in order to advance their goals. And it is measured, amplified, and rewarded based on its ability to do that. Period. As a result, we get…well, what we get. And it’s getting worse.”
Advertising provides a channel for businesses to speak to consumers. This function is hugely important for any digital brand. But the disconnection between the advertiser and consumer is getting worse. The world’s biggest advertiser, P&G, also made a bold statement about making advertising better. With brands like Medium and P&G being very vocal about these issues, there’s a huge opportunity for innovators to provide a solution that works better for businesses and consumers.
Who’s data is it anyway?
The FTC has fined Vizio $2.2 million for collecting viewing histories from 11 million smart TVs without the consent from the owners. Vizio collected all video viewing activity and linked it to some detailed demographic data before selling it to third parties. This is a clear sign from regulators that businesses must respect the privacy of consumers and be transparent in how they use customer data.
Consent is central to the new GDPR regulation in the EU which businesses have until May 2018 to comply with. A new report from the DMA revealed that 1 in 4 marketers believe their businesses will be “unprepared” and a third do not expect to be compliant. With fines of up to €20 million or 4% of global revenue (whichever is higher) the stakes are preeeettty high.
A big year for Market Research
The fragmentation of the data economy is radically changing the market research industry. The survey is no longer the only means to collect data and generate insight – meaning the participation in market research is effectively a data exchange. If the value exchange is poor (which it is – long boring surveys for no/little reward) it will suffer the same woes as the advertising industry. I gave a talk to Ipsos MORI about these issues which you can watch here.
The latest industry GRIT report shows that the most important factors in research design is being able to trust the results (74%) and the quality of the data (50%). Big data, automation and storytelling are considered “game changers”. And the areas researchers are planning to increase their attention on is integrating digital data with survey data (57%) and the use of social media data (54%).
I strongly believe the next generation of market research tools need to be; mobile native, integrate data from multiple sources (mobile app data, social media, survey data, etc.) and create a good participant UX with a fair value exchange to ensure better data quality.
Every area of marketing is under pressure. All activity is becoming data driven, but that data is personal data. What we’re seeing, from market research to advertising, is a lack of focus on creating customer value. All areas of the marketing wheel need to start delivering value or face continuing disengagement.
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Also published on Medium.