In the Battle of More Data vs. Better Algorithms, Better Data Beats Them Both

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In a series of articles last year, executives from the ad-data firms BlueKai, eXelate and Rocket Fuel debated whether the future of online advertising lies with “More Data” or “Better Algorithms.” Omar Tawakol of BlueKai argues that more data wins because you can drive more effective marketing by layering additional data onto an audience. While we agree with this, we can’t help feeling like we’re being presented with a false choice.

Maybe we should think about a solution that involves smaller amounts of higher quality data instead of more data or better algorithms.

First, it’s important to understand what data is feeding the marketing ecosystem and how it’s getting there. Most third-party profiles consist of data points inferred from the content you consume, forms you fill out and stuff you engage with online. Some companies match data from offline databases with your online identity, and others link your activity across devices. Lots of energy is spent putting trackers on every single touchpoint. And yet the result isn’t very accurate — we like to make jokes around the office about whether one of our colleagues’ profiles says they’re a man or a woman that day. Truth be told, on most days BlueKai thinks they are both.

One way to increase the quality of data would be to change where we get it from.

Instead of scraping as many touchpoints as possible, we could go straight to the source: The individual. Imagine the power of data from across an individual’s entire digital experience — from search to social to purchase, across devices. This kind of data will make all aspects of online advertising more efficient: True attribution, retargeting-type performance for audience targeting, purchase data, customized experiences.

So maybe the solution to “More Data” vs. “Better Algorithms” isn’t incremental improvements to either, but rather to invite consumers to the conversation and capture a fundamentally better data set. Getting this new type of data to the market won’t be easy. Four main hurdles need to be cleared for the market to reach scale.

Control and Comfort

When consumers say they want “privacy,” they don’t normally desire the insular nature of total anonymity. Rather, they want control over what is shared and with whom. Any solution will need to give consumers complete transparent control over their profiles. Comfort is gained when consumers become aware of the information that advertisers are interested in — in most cases, the data is extremely innocuous. A Recent PWC survey found that 80 percent of people are willing to share “information if a company asks up front and clearly states use.”

Remuneration

Control and Comfort are both necessary, but people really want to share in the value created by their data. Smart businesses will offer things like access to content, free shipping, coupons, interest rate discounts or even loyalty points to incentivize consumers to transact using data. It’s not much of a stretch to think that consumers who feel fairly compensated will upload even more data into the marketing cloud.

Trust and Transparency

True transparency around what data is gathered and what happens to it engenders trust. Individuals should have the final say about which of their data is sold. Businesses will need to adopt best practices and tools that allow the individual to see and understand what is happening with their data. A simple dashboard with delete functionality should do, for a start.

Ease of Use

This will all be moot if we make it hard for consumers to participate. Whatever system we ask them to adopt needs to be dead simple to use, and offer enough benefits for them to take the time and effort to switch. Here we can apply one of my favorite principles from Ruby on Rails — convention over configuration. There is so much value in data collected directly from individuals that we can build a system whose convention is to protect even the least sensitive of data points and still respect privacy, without requiring the complexity needed for configuration.

The companies who engage individuals around how their data is used and collected will have an unfair advantage over those who don’t. Their advertising will be more relevant, they’ll be able to customize experiences and measure impact to a level of precision impossible via third-party data. To top it off, by being open and honest with their consumers about data, they’ll have impacted that intangible quality that every brand strives for: Authenticity.

In the bigger picture, the advertising industry faces an exciting opportunity. By treating people and their data with respect and involving them in the conversation around how their data is used, we help other industries gain access to data by helping individuals feel good about transacting with it. From healthcare to education to transportation, society stands to gain if people see data as an opportunity and not a threat.

Marc is the co-founder and CEO of Enliken, a startup focused on helping businesses and consumers transact with data. Currently, it offers tools for publishers and readers to exchange data for access to content. Prior to Enliken, Marc was the founding CEO of Spongecell, an interactive advertising platform that produced one of the first ad units to run on biddable media.

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