3rd Party Data, by Board Member and Principal at Opera Solutions, Danny Flamberg

Danny Flamberg looks into third party data being under attack and a new era of new privacy concerns for users and providers

Third party data, the mother’s milk of direct, database and performance marketing, not to mention programmatic media buying, is under attack. Privacy concerns about the volume of data collected, the methods used and the uses of robust consumer profiles could limit or possibly eliminate proven targeting options for marketers.

Apple CEO Tim Cook pointed to the key issues when he said, “Every day, billions of dollars change hands, and countless decisions are made, on the basis of our ‘likes’ and dislikes. … These scraps of data — each one harmless enough on its own — are carefully assembled, synthesized, traded, and sold.”

“Taken to its extreme, this process creates an enduring digital profile that lets companies know you better than you may know yourself. Your profile is then run through algorithms that can serve up increasingly extreme content, pounding our harmless preferences into hardened convictions.”

Tim Cook’s privacy pitch is part Jeremiad and part competitive positioning. Apple collects and uses plenty of personal data, though not in the same way as Google, Facebook or Amazon. Denying these competitors third party data would yield an advantage to Apple, which is making strides in fitness, healthcare and other areas where their devices will produce troves of personal data which can be used in a variety of ways to drive profits.

Yet he brings up the data paradox – consumers want it all — privacy protections and personalized, useful and relevant messages. Consumers understand and accept data collection as a fact of life. In fact, they expect a quid pro quo.In return for giving up personal information, they want deals, coupons, special or early access, rewards or points and inside information.

People want to be recognized. It’s as if they are saying, “Use what you know about me. Keep me up-to-date. Treat me special. And tell me about things I like or care about.”   When consumers ask brands to “know me” they expect that the sum total of interactions plus the tone and tenor of the relationship will be used to super-serve them.

New kinds of data collection and analysis about consumers’ online activities will dramatically increase the productivity of the Web and social media as brand communication channels. But marketers need an open attitude toward privacy, plus widely available and easy-to-use mechanisms for opting out.

Ownership of data is a fundamental human right. So is the option not to be tracked and not to play with brands. The only debate about the Federal Trade Commission’s “Do Not track” policy should be about the terms and conditions for implementation.

The marketing reality is that effective opt-out tools, full disclosure and avenues to avoid tracking, yield better, more responsive databases filled with consumers who are genuinely open and interested in messages from brands. That’s why marketers must support neutral solutions like the Open Data Partnership or concepts offered by the IAB or the DMA. Similarly, marketers must comply with the new California privacy laws and work in the spirit of the EU’s privacy protocols.

Third party data gets a bad rap based on the actions of unscrupulous brokers and junkyard dog data collectors, sellers and aggregators who use all kinds of underhanded means to gather and resell data which is often out of date, fragmented and filled with errors.

There are, however, reputable, ethical third party data originators who carefully opt-in, collect and document the provenance of their data. These guys can be tested and trusted to provide the kind of data points that enable and accelerate precision marketing. They can document the opt-ins and the provenance of each data element they collect. This documentation is generally available on-demand can be used to insure compliance with data privacy laws.

Using only vetted and documented third party data, and holding its purveyors accountable, is the elegant and responsible solution. There’s no reason for marketers to ditch third party data.

To see more of Danny, check out his piece on the Four Essential Worries of Marketers.