No, Advertisers, Data Is Not the Holy Grail

Advertising has never been a profession for the humble. When I was in it briefly during the Mad Men era, it was driven by the creatives, who thought they could tap into the deep psychological insecurities of the consumer, often while half drunk. Forty years later, it's driven by engineers, who are no less arrogant than their Don Drakish predecessors.

Listening in at the AlwaysOn OnMedia Conference NYC to a panel on DeMystifying Online Advertising, the panel advances the position that advertising has become data-driven, and that in the data lies The Answer for the advertiser. In the future, creatives will have to know math, and design ads the way bloggers now optimize for keywords. Ads are being A/B tested like web sites, and Madison avenue is beginning to look like Google. Finally, the key has been found to unlock the purchasing power of the right consumer at the right time.

But these ads are being optimized for old media like display and TV, not necessarily where people really are going—online and increasingly mobile. Those devices demand different strategies.

In these arenas, privacy concerns could really throw a monkey wrench into advertising's best-laid plans. Already Facebook, which is the king of data repositories about all of us, has refused to share data with Rapleaf changing the game for data exchanges and data sellers.

Thanks to a series of stories about Rapleaf and privacy in the Wall Street Journal more people have become attuned to the possibility that cookies and other tracking systems can collect information about personal habits or preferences, and sell that back to advertisers, whether you as a customer want them to do that or not.

As consumers wise up to the selling of their personal data, the wisest business models make statistical assumptions without cookies or saving personal data. A voluntary do-not-track option has emerged, and standards are emerging for industry self-regulation. At least two organizations, Online Publishers Association and the Network Advertising Initiative are engaged in driving consensus around issues of data privacy.

At the same time, advertisers want to get this information because it does stop them from serving up Viagara ads to young women. Brands are moving to integrated campaigns: with part of their budgets for display and part for mobile. They have gone to online advertising because the data makes it work 10x better. They can spend an incremental dollar online and get MORE than just an uptick in customers— they can add an entire new market segment.. And the data gathered is then valuable in the design and placement of future ads. In fact, it's a toss up between whether the data or the ad is more valuable for the advertiser. Those two must be evaluated separately and then integrated together.

My sense is that the consumers, who don't want their cell phones spammed or their web browsing interrupted by pop-ups and interstitials, are one step ahead of the ad agencies and media buyers here, and that advertising is not done being disrupted.

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