Media buyers should follow five key criteria when venturing into the complex and opaque ecosystem of third-party data that is designed to help them target their programmatic digital media buys.
The criteria are part of “Data Sources for Media: A Buyer’s Guide,” a comprehensive new report from the ANA Trust Consortium, which was launched by the ANA in 2019 in partnership with ANA general counsel Reed Smith to restore trust in the marketing ecosystem.
The Guide is designed to help buyers improve the productivity of their investment in data to better achieve their strategic brand and business building goals. This is an urgent need since marketers invest heavily to procure relevant data. According to the Interactive Advertising Bureau, advertisers spent $19.2 billion on third-party audience data and related solutions in 2018.
“Improving marketing decision making is a strategic imperative for marketers,” said ANA CEO Bob Liodice. “Buyers require transparency about the sources, methodologies, and processes used by their data vendors. This new Guide offers valuable advice about how they can achieve those goals and in so doing optimize the potential of their media investments.”
Last year the Trust Consortium formed a working group to focus on data sources and to create a roadmap for the use of external (third-party) data for digital media programmatic buying, which currently accounts for more than 80 percent of all U.S. digital ad spending.
The Guide defines third-party data as “data that is purchased from or traded for something of value with the party which had the consumer relationship. Overall, when acquiring data from an external source, it’s likely that the data is third-party.”
The Guide states that third-party data comes from many different sources and multiple methodologies can be used in its collection, structuring, and marketing, thereby making it difficult for advertisers to understand exactly what they’re buying.
The Guide recommends that advertisers focus on five criteria to evaluate the quality of a dataset before purchasing it:
- Accuracy: Does the data actually mean what the marketer thinks it means, e.g., are visitors to an auto website actually more likely to buy cars?
- Precision: Are the data collection and modeling procedures sufficiently precise to avoid many false positives, e.g., does the vendor use a lookalike model that assigns people to the audience who shouldn’t be included?
- Recency: How regularly is the data refreshed, and when was it last refreshed?
- Coverage: Does the dataset cover enough of the marketer’s intended campaign audience to provide necessary scale?
Deployability: Can marketers use the data with their chosen tech partners?
“The Guide, compiled by a collection of experts at virtually every level of the ecosystem, is a tool that helps marketers understand and navigate the complex issues surrounding data and the choices they make in suppliers,” said Douglas Wood, ANA’s General Counsel with Reed Smith. “It simplifies complex terms into understandable action steps,”
The Guide also recommended that the selection of a data provider should be treated as a key marketing decision and that advertisers should follow a checklist when considering a new data partner or new offering from their existing partner:
- Read the Data Label, which is an industry standard for third-party data providers that gives advertisers a standard set of information about the contents of an audience, such as size, refresh date, and lookback window (i.e., how long a record can remain in the dataset before it is expunged).
- Ask additional questions of the data provider to help determine the suitability of the dataset. The questions should address the five data quality dimensions and should also address data compliance/privacy requirements.
- Consider engaging a third party to verify the data. Independent data-quality verification services are a relatively nascent industry but can significantly improve an advertiser’s ability to evaluate data quality.
“Given the substantial budgets involved, advertisers should play a lead role in establishing the criteria and sources of third-party data used for their media campaigns, and then continuously evaluate data quality as part of their overall media optimization process,” said John Nardone, CEO at Flashtalking, who led the group that developed the Guide.
To download Guide, CLICK HERE.