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How to become a data-driven business

Brands think the 'Me2B' economy will level the playing field with ad tech's walled gardens

How to become a data-driven business

Marketers are increasingly anxious at how the advent of personal data management will disrupt how they execute their media plans, a concern aggravated by the EU Data Protection deal brokered earlier this month. Some some see it as a chance to strike a new “social contract” with their customers and consequently become less reliant on data held by the likes of Facebook and Google, The Drum's news editor Seb Joseph investigates.

Imagine a future where people are agents of their own information choosing which brands they rent their data to, rather than advertisers knowing more about them than they care to (knowingly) share.

The rise of 'Me2B'

Industry observers at this year’s Ctrl-Shift conference call this the rise of the "Me2B" economy and predict it will give advertisers a chance to personalise at scale in a way that until now has been dependent on the data contained within the walled gardens of the world’s largest technology firms.

“I’m envious of the data Facebook has, and even more so of Google,” admitted Unilever’s vice president of people data and marketing analytics Shawn O’Neil.

“If the customer starts to own the data then all of a sudden we’ve levelled the playing field amongst all players… because when an individual owns it, and begins to monetise it for their own gain, then it changes the way in which we have access to it as an organisation.”

'Juggling act'

His comments are emblematic of the pressure many marketers are under to juggle transparency and personalisation, especially at a time when consumers increasingly voice concerns about faceless corporations asking to trust them with their data.

While companies have waxed lyrical about creating a value exchange through the use of customers’ data, there are still major hurdles to overcome when 73 per cent of Android apps and nearly half (47 per cent) of iOS apps share personal, or location data with third parties, according to MIT.

“The big data dream has been massively oversold and so the issue that brands are struggling with is that the more they try and do the traditional stuff like data-mining, analytics, personalisation and targeting then actually the less comfortable customers get," said Alan Mitchell, strategy director at Ctrl-Shift.

“We’re advising more marketers about how their brands can become a genuine service provider to the customer through personalisation. That’s a massive opportunity," he said. "For some of the technology companies [such as Facebook and Google] that have been pushing particular solution it’s not so much of one and they’re threatened by it.”

Levelling the playing field

However, “privacy versus growth is a balancing act” and “you can solve both sides of the equation”, countered Facebook’s chief privacy officer Stephen Deadman. He went on to explain that despite being only 11 years old, the world’s largest social network has expanded so quickly because people trust it with their data.

There are some detractors out there who will disagree with that claim – particularly in light of some of the controversial ways it has used people’s data – although other Facebook executives have previously cited its commitment to privacy as the chief reason why the ecosystem will remain closed in order to protect its users’ data.

This was a point that Facebook's Atlas chief Brian Boland explained to The Drum earlier this year, when asked to answer critics that would assert that it qualifies as one of the industry's 'walled gardens'.

While Deadman did not delve into what Facebook is (or isn’t) doing to prepare for people having more control over their data, he did reveal that it had invested a great deal in trying to improve consent and privacy, which was dismissed by regulators.

The Facebook executive went on to claim that legislation has treated data a “toxic waste” that needs to be constrained and disposed of.

Legislation as an opportunity, rather than an inhibitor

And yet there are signs of change from regulators. Next year’s introduction of new European data protection rules will increase the stakes for protecting information and in turn impact how the likes of Facebook and Google work with media agencies using third-party data. Third party data is a highly commoditised market rapidly becoming uneconomical because of the huge volume of ads online not being clicked on by real people.

“This legislation is going to create a situation where the agencies that are able to absorb and make use of their clients first party data are going to be the ones that succeed,” said Henry Lawson, chief executive of Autograph, a Seattle startup that allows users to get targeted deals.

“It’s the reason why Sir Martin Sorrell is building an enormous data capability with Xaxis because if you have the ability to absorb that first-party data what they won’t be able to do is buy third party data and present it to the client as their own homework and say look at how clever we’ve been.”

Better articulating your terms

Indeed, regulation doesn’t need to inhibit marketing and can be quicken innovation. Telecoms firms such as Vodafone and O2 are already investing in trust to curb an opt-culture they fear is being accelerated by ad blockers and encryption.

Vodafone’s group head of customer permissions management Chad Wollen said it’s creating services that are “built from the bottom up” and accept that data belongs to customers, while O2’s chief marketing officer has recently taken on the responsiblities of a chief data officer.

Earlier this month, research from cloud IT outfit Intralinks unearthed deep concerns among business leaders that their outfits may fall foul of data privacy regulations, with many also concerned about "balkanised" data privacy laws across the globe, and how this will effect their ability to implement a globally coherent marketing strategies.

Ron Hovsepian, chief executive of Intralinks, said: “New data privacy laws are being enacted across the globe in an effort to better. In this rush to update how personally identifiable information is handled within each region, international business strategies, practices, and processes are being called into question, causing global confusion around data sovereignty.”

The survey, which quizzed over 350 business leaders, also found that over 70 per cent of respondents expect to increase spending in order to meet data sovereignty requirements in 2016.

Almost a third reported that they expect increased budget allocation to address data privacy over the next two years. Meanwhile, of those who plan to overhaul their data privacy strategies, 38 per cent said they plan to hire subject matter experts, and 27 per cent will hire a chief privacy officer

Growth through trust

In a world where data has value to individuals as well as companies, marketers need to help to make information a personal asset and not just a corporate one. Mywave, a tech company with an intelligent assistant is launching in Europe to capitalise on that need. People using the personal assistant are promised control of their data if they use Mywave, allowing the service to offer ts brand partners better acquisition and retention by only partnering them with people who want to share their data.

MyWave’s first publicly announced New Zealand customer, energy management firm Saveawatt’s chief executive Tim Rudkin hailed the benefits of the service, which it is running small scale tests ahead of a full launch early 2016.

“Relationships between brands and consumers need to be centred around permission to share information, and that permission must be based on trust, respect and a two-way conversation that provides mutual value to the consumer and the brand,” said Geraldine McBride, founder and chief executive of MyWave.

“This is the basis for personal data revolution, and only intelligent assistants that respect these norms of human relationships will prosper in today’s digital economy.”