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Why Companies Need to Own Their Own Digital Advertising Data

According to a PwC report released in 2019, just 25% of every dollar put toward digital advertising makes it to a viewable impression. That’s largely because a host of intermediaries along the value chain take some of the spend – from agencies to technology companies to demand and sell-side platforms and more. However, these chains are so opaque and hard to follow that most brands might not know this is an issue. It’s often too late to do anything if they do eventually find out. 

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It all boils down to one word: transparency. As helpful as agencies can be in ensuring online ads get in front of the right people, they can’t typically provide a detailed level of reporting. It doesn’t help that brands don’t historically own the data they need to truly understand where their dollars are going. And because many are unaware of this problem, they’re not asking for deeper analytics. 

At the same time, some marketing departments may pay more attention to softer KPIs, because it can be difficult to get hard quantitative data from advertising campaigns, so they’re not as in-tune to analytics as sales, finance and other parts of their business may be. 

Increasing transparency is key to delivering results you can quantify.

Own your data

A growing number of companies, and especially larger brands, are finally realizing  their digital ad dollars may not be going as far as they thought. Over the last few years, more companies have started asking for more transparency, more control over information and more insight into how their money is being spent. Many brands also now realize the data to determine where their spend is going does exist. 

As a result, businesses have started renegotiating contracts in a way that allows them to own their ad dollar-related data. This is a critical first step toward greater transparency. If you control your information, you can develop an ad spend audit trail. You can see what parties are part of the value chain, who’s taking what percentage of the spend, what happens with their money at each step and so on. The companies that arm themselves with this kind of information can then optimize that value chain to get the most out of their money. They can see, for instance, that partner A, B and C really do add value, while partner D doesn’t — and then make adjustments quickly. They might notice that one business charges more than another and switch up who they work with. 

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Catching fraud

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Ad fraud is another reason why companies need more transparency. It’s expected to cost companies a total of $44 billion in 2022, up from $19 billion in 2019, according to Statista. There are a growing number of companies that generate fraudulent clicks that could eat up a large portion of a company’s ad spend. In these cases, everyone along the value chain gets paid, but it’s the advertiser that ends up with fewer (often far fewer) real impressions than expected. Fewer legitimate impressions results in both less real reach and conversions.

When companies own their own data, they can more easily tell where ad fraud is coming from. Say a company notices one firm charges more per impression, while another charges less, but 50% of the clicks coming from the cheaper vendor are fraudulent. In that case, this business isn’t getting more bang for their buck by going with the cheaper vendor and may want to move to the more expensive, but more reliable, vendor. 

The ultimate goal is to drive greater value from your media spend by increasing the percentage of each dollar that goes toward buying a viewable impression. 

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Start considering costs 

Increasing transparency isn’t a simple process.

Besides the need to renegotiate contracts and bring data in-house, businesses should also have the right tools and technologies in place to analyze all this information. Our Media Intelligence platform, for instance, gives companies much more visibility into their media spend.

Using a company’s in-house data, longitudinal data and vetted third-party data sources, businesses get real-time impression reporting, which they can then use to see who they’re paying and where their ad spend is going along the value chain. While more companies are now using out platform to help make better spending decisions, there are still too many businesses doing what they’ve always done. 

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As the industry evolves, though, and as CFOs and CEOs take a harder look at where they’re spending in general and, particularly, post-pandemic, CMOs should think more carefully about their ad spends. After all, media is one of the largest budget items within marketing. At the moment, most CFOs have no idea how those dollars are being spent, but it probably won’t be long before they start looking into it. Every function, every division, every team within a company wants more transparency and data analytics to help drive decisions and increase returns – it’s time marketers demand more information and insights, too. 

[To share your insights with us, please write to sghosh@martechseries.com]

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