A view from Mark Cripps

Marketers must solve the data paradox

Data transparency brings with it new challenges for marketers, who should steel themselves for squabbles over data and channel investment, writes Mark Cripps, the executive...

At The Economist, we’re at the forefront of using data for marketing purposes – it’s one of the root causes of our recent success in performance-related industry awards (Creative Effectiveness gold Cannes Lion, DMA Grand Prix etc).

Of course, more data in marketing is a good thing, right? The transparency it delivers will help you determine what is, and what is not, effective? Maybe but not always.

A decade ago, I advised my then client to implement tagging across all of his digital marketing. His response shocked me: "We won’t be doing that!" In answer to my incredulous "Why not?", he said: "It’ll reveal a load of new stuff that’ll need fixing and that’ll create extra work for us."

Dumbfounded back then, I now realise he was on to something. I have learnt that getting to good data is onerous to achieve, causes more work and the transparency it affords can muddy the waters.

There are well-documented challenges that can undermine the roll-out of data platforms, including issues related to cost and the incremental resource and effort needed to get clean, "un-noisy" data into systems.

These are in addition to the critical problem of ensuring the ethical use of personal data. Less well-documented are the new issues that data transparency generates and, as an industry, we need to resolve.

First, consider the internal perspective. It takes resource and effort to build, nurture and analyse data. Even when that is overcome, the ROI of this activity is not always immediate – more often than not, it’s a slow-burn exercise with extended periods of preplanning (resolving issues around data hygiene), rounds of data validation and never ending creative and media optimisation tests.

And yet there is tremendous pressure from company boards to get quick returns. That, in itself, is difficult to manage – a situation compounded by the complexity of what we’re trying to achieve.

Watching marketers try to explain structural equation modelling to an already harried C-suite audience – while entertaining – can be quite painful. There is an undoubted burden on us to simplify what is, for some, a tough conversation – a weight best shared with the likes of The Institute of Direct and Digital Marketing and other institutions.

And then there’s the in-house political power play. He (or she) who holds the data wields the sword. The ability to make decisions about where to invest, based on what the new transparent data sets tell us, won’t always be popular. But it is powerful – so less mature organisations should steel themselves for some nasty infighting.

The squabbling over data and channel investment will extend to media networks and agencies too. An ability to run true and transparent attribution means channels currently getting credited with a majority of sales (.com, organic search etc) will get diluted in terms of contribution to the conversion journey, with their associated investment potentially at risk.

Transparency impacts the media budgets agencies and publishers receive and, for those on performance-based remuneration, it affects the amount they are paid.

A majority of today’s media efforts are managed on a last-click basis – it is universally understood and dictates how growth targets are set. However, in a transparent world, there’s a requirement to reward beyond the last click.

Conversion-journey openers, advancers and closers will be assigned appropriate weightings according to their contribution. Getting to an equitable solution that’s auditable and controllable is challenging and has the potential to increase the overall commissions paid out by the brand if not properly managed.

Improved data clarity has the ability to isolate fraudulent behaviour at a granular level – that’s partner, network, publisher or channel. You obviously don’t want to engage with any potentially rogue partners, but knowing that you’ve been ripped off for years is unpalatable and results in tough discussions (internally and externally).

Despite these challenges, the important thing is not to get overwhelmed and opt for inaction. There’s a potential muddy data tsunami approaching. It’s mostly a good thing but it’s best to ride it with your eyes open.