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June 20, 2013, Article

Article

The "Big Data" Fallacy

Link to original Digiday article

The advertising industry has been told that data is the future, and that they need to invest heavily in technologies like data management platforms to collect and store the data.

Investing in a DMP is something of a credibility test, with advertisers under pressure to make this “big data” technology the central component of all marketing strategy with other pieces, including multiple DSPs and networks, plugging in to the DMP.

The problem with this strategy is that it is based on a fallacy — big data is just regular data, and its something every business should already be built on. Successful online advertising is not about accumulating data, but actually doing something with it. The DMP and DSP are elements of a larger solution. Marketers don’t need a single data platform – they need a comprehensive marketing operating system.

The age of big data is really no different from what businesses should have been doing all along. Data is prevalent in every organization. Financial advertisers have always sat on top of mounds of information. Online retailers know who is purchasing their products and where, because that information is required in every transaction. Online publishers rooted in old media have subscriber data that is more robust than online data, so they have an excellent sense of who is visiting their site.

This is important data for marketing, but it represents just one component in a well-balanced strategy. Data only provides value when matched with media, so advertisers actually need access to media operating in tandem with their data. Starting with a DMP and plugging in multiple demand platforms creates a disjointed effort. Putting a single operating system in place allows marketers to manage multiple supply partners, apply data and drive higher success rates.

DMPs on their own capture data, and maybe sort it, but an advertiser isn’t necessarily getting any benefit that moves the bottom line. A separate DMP is the same thing as opening Oracle on the desktop. It’s a single program running on top of Windows. What advertisers really need is a Windows-like system that includes the DMP. I’m not advocating against DMPs. Data is crucial, and first party data has immense value in advertising, both online and off. But in the increasingly programmatic world, data is one component that marketers need to combine with media, analytics, ad serving and support.

Advertisers need to see how certain insights fuel performance, and how their campaigns can adapt to new findings along the way. Is one particular audience segment looking at one page of the site, then leaving, but coming back when served a targeted ad on the same day? Are those visitors more likely to convert on Facebook compared to a standard display ad?

Data can teach advertisers a lot about their consumer base, but it’s useless unless utilized with a buying platform, and it's best when those two components are part of a larger OS. Data platforms are a easy way to buy data credibility, but they are dollars misspent, which could be going toward ad campaigns that actually prove the worthiness of investment in data.

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