Big data is not somebody else’s problem
Teradata’s Mark Ash looks at how digital agencies and clients can best align their goals when it comes to utilising big data.
With the continual development of disruptive technologies such as programmatic, the constant evolution of digitised consumer touch points, along with daily introductions of new technology and their measurement – marketers and media industry stalwarts could easily have a full time job on their hands just keeping abreast of the landscape in which they work.
Most brands on the other hand rely on their tech partners and agencies to be constantly educated and knowledgeable about these matters. They are acutely aware of the need to deliver a data-driven, omni-channel model, but rely on their agencies to understand how to get there. At the same time, brands expect their agencies to stick to plans, agreed KPIs and ensure every year’s results improve on the last.
When it comes to advertising delivery, the focus on data has changed the relationship brands have with vendors and media agencies. As a customer centric specialism, data-driven marketing has historically been managed by clients directly or through specialist CRM vendors/partners who managed brands customer data and its deployment across offline marketing campaigns. Rarely before has it impacted the digital advertising arena.
Programmatic buying has changed all that, and ushered in a new era where advertising has been empowered by data-driven practices. However, as the advertising world becomes increasingly orientated around data, it begs the question: are they up to the task and should it be their responsibility to ‘own’ the data question?
The digital media world has been built around an environment that reflects the classic marketing organisational structure and performance metrics of their clients i.e. planning in channel silos, short-term KPIs and remuneration tied to spend level or CPA performance.
This isn’t the fault of agencies, but represents a market dynamic that has evolved around the limiting nature of performance assessment created by disconnected, misleading channel centric digital tracking and the creation of siloed marketing budgets. These have little bearing on marketing effectiveness, but often undermine the customer experience and efficiency of the sales operation in the long-term.
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Digital agencies and vendors are therefore being measured against siloed KPIs that commoditise their service around a last-click attributed CPA in a 30 day cookie window that completely ignores the value of creativity, testing and early stage demand creation and relationship nurturing.
In being driven towards ever harsher performance targets and lower payment, agencies are making decisions on the basis of margin whilst vendors/networks are trying to take credit for sales through dubious means. As a result, there is little interest for agencies/vendors to seek the truth of a properly optimised media operation. What’s more, the agency landscape is fragmented, either focused solely on advertising to an anonymous audience or entirely on CRM, but seldom both as part of one process.
Some agencies who are fully aware of the benefits of data-driven marketing are only implementing strategies where it is advantageous to the agency to do so. Transparency on margin is therefore a real issue. In other cases, brands work with agencies/networks to collect and utilise their rich customer data but fail to understand that it is owned by the agency.
Whilst there is an argument for brands to take control of their own insight, they also need to enable their agencies to harness it to improve future marketing planning.
However, even the best, most educated, more immersed agency partner is going to struggle at times to understand your business, customers, structure and brand in the same vein as someone who works in the building 24/7.
I believe that agencies have a role to play in doing what they do best, creating and releasing creativity across every and any customer touch point – by utilising technology and data to bring brands to life and make it mean something to their consumers.
Transparency is key here. Agencies need to get away from the conflict of interest of managing the clients’ long-term interests and making a business from media arbitrage. The same applies to tech vendors who often play a dualist role in the process.
Programmatic opens the door to brands taking control of certain campaign management aspects of their business – but this alone does not reflect the value that agencies bring to the table. By de-leveraging their reliance on media margin or trying to control, own and monetise their customer data, they can come to the table with open arms.
Brands, likewise, need to respect agencies for their expertise and pay them accordingly.
Agencies frequently talk about fresh approaches to business models; this will shift the dynamic away from short-termist burst campaigns towards bigger-thinking, strategic customer centric planning, which supports and enhances the client’s business goals over years, not months.
Seeing the transition in the market, many agencies are re-inventing themselves and taking full advantage of the opportunities that data can provide, others are finding it harder to adapt. It’s up to brands to take the opportunity to re-examine their relationship with agencies and vendors. They need to place the objectives of a customer-centric marketing strategy at the heart of the agency/vendor relationship.
Ultimately, brands need to challenge their partners to adapt in the right way to the current media landscape. This will require businesses to undergo a transformational process to ensure omni-channel marketing becomes a reality and address the balance between advertisers and their agency relationships.
Mark Ash is director UK & Ireland, Teradata Interactive.