The Grand Reopening of the U.S. Economy Will Happen, Plan for It

We are in uncharted territory, much as we were in previous economic downturns and recessions. Yet, do know, another expansion will follow … eventually. There will be a grand reopening of our economy, and as marketers, we need to plan for it.

I love defaulting to optimism – even in the darkest of times. It’s been part of my survival mechanism through all sorts of crises. That being said, we are in uncharted territory in this new normal, much as we were in previous economic downturns and recessions. “The Great Recession” of 2008-2009 was largely Wall Street born and Main Street slammed. But remember, the Great Expansion followed. A possible recession stemming from COVID-19, however, would be largely reversed, with millions of livelihoods suddenly denied, and both Main Street and Wall Street being slammed in tandem. Yet, do know, another expansion will follow … eventually. There will be a grand reopening of our economy, and as marketers, we need to plan for it.

Listening to the U.S. President talk about getting parts of our country back to some semblance of normal by Easter may seem wild-eyed and some might say irresponsible. In reality, China is reportedly already back on line – after six-to-eight weeks of paralysis. Does this mean a possible “V-shaped” recession (very short), a “U-shaped” one (mild), or an “L-shaped” one (long term)? We don’t know.

It’s always dangerous to make prognostications, but we can learn from patterns elsewhere in the virology. With the United States now the most afflicted nation in sickness, we yet have a massive fight ahead to control viral spread. And doubt and fear have taken hold as two debacles have come about, one public health and one economic.

Unfortunately, there is no “on/off” switch for the viral crisis. Even when its spread is curtailed, which will happen, we’ve been shaken and edginess is going to remain. That’s only human.

Patterns of consumption will not resume as if nothing happened. Unemployment shocks will not reverse as easily as they came. So there will be a “new” normal.

However, a reopening is coming. You might say that’s my optimism, but folks – we are going to be okay in a time. It may not be of our choosing, as Dr. Fauci faithfully reports, but one that will be here nonetheless. As marketers, let’s get ready for it.

Look to Your Data to Prepare for What’s Next

Recessions are actually good times to look to the enterprise and get customer data “cleaned up.” The early 90s recession gave us CRM, and database marketing flourished. The end of the Internet 1.0 boom in 2000 brought data discipline to digital data. And the Great Recession brought data to the C-suite.

So let’s use this time to do a data checkup. Here are four opportunities:

  1. Data audits are often cumbersome tasks to do – but data governance is a “must” if we want to get to gain a full customer view, and derive intelligent strategies for further brand engagement. Quality needs to be the pursuit. Replacing cookie identification also is a priority. Understand all data sources to “upgrade” for confidence, accuracy, privacy, and permissions.
  2. March 15 might be a good date to do an A/B split with your customer data inputs – pre-virus and during-virus. What new patterns emerged in media, app usage, mobile use and website visits? Are you able to identify your customers among this traffic? If not, that’s a data and tech gap that needs to be closed.
  3. Customer-centricity or data silos? It’s always a good time to tear down that silo and integrate the data, yet sometimes healthy economic growth can mask this problem. Use the recessions to free up some time to actually get the work done.
  4. Test new data and identity solution vendors to increase match rates across your omnichannel spectrum – to better create a unified view of audiences, both prospects and customers. I’ve already seen one of my clients come up with a novel offer to analyze a subset of unidentified data to drive a substantive lift in matches.

As we work remotely, it’s important to understand that this current state of crisis is not a permanent state. Only once the virus is conquered, on its weaknesses not ours, can we really have any timetable to resume the economy. That being the health science, it just makes great business sense now to “stage” your data for that eventual Grand Reopening.

2020: A Big Year for Media Spend Will Underscore Data’s Role in Marketing Strategy

With the longest U.S. economic growth span on record, one might think the wheels may be about to come off of the economy — and marketing spend along with it. Not so, says Bruce Biegel, senior marketing partner at The Winterberry Group, during his annual forecast about marketing strategy.

It is the best of times.

With the longest U.S. economic growth span on record, one might think the wheels may be about to come off of the economy — and marketing spend along with it. Not so, says Bruce Biegel, senior marketing partner at The Winterberry Group, during his Direct Marketing Club of New York annual presentation, “The Outlook for Data Driven Advertising & Marketing 2020.”

marketing strategy
Source: Winterberry Group (2020), with Permission | Credit: Winterberry Group

Sure, there is caution. The Great Recession displaced many — and served to accelerate digital disruption from retail to finance to certainly marketing, forever. Perhaps businesses have never felt safe, sound, and secure ever since. One might call it “wise agitation.” And it really has been consumer spending that has served as the primary driver of growth, particularly in 2019.

Not the R Word …

Outside of business caution and flat earnings, where are the signs of another recession? They are hard to find.

Inflation and wage growth are hardly sputtering — even as the nation’s unemployment rates are at record lows. Trade rows and impeachment proceedings only appear to buoy the stock market. Even inside the world of marketing, privacy restrictions have not diminished the luster of data deployed for marketing and insight. And with the Olympics and a General Election this year, it should be times aplenty for many media channels, agencies, data providers, and tech companies — as these events are traditional hallmarks of spending.

So who are some of the winners in the current marketing and media environment?

… But plenty of D, Even Still

D, as in Direct: Biegel noted that “Buy Direct” is creating continuous rise and sale in DTC [direct to consumer] brands. The subscription economy is booming and traditional distribution channels — read, retail — continue with a “D” of their own, “disintermediation.”

“The five-year growth (through 2019) of DTC retail is four times that of the retail market revenues — 7.64% growth vs. 1.78%,” he reports.

That doesn’t translate to digital-first success, however, as such approaches are not scaling as rising costs in paid social, for example, are inhibiting customer acquisition.

marketing strategy
Source: Winterberry Group Spend Estimates (2020)

D, as in Digital: Online media spending overall grew by 19.1% in 2019 — compared with a 5.9% decline in offline media spending for the same year. Among all digital media categories in 2019, paid search grabbed the largest share — followed by display and paid social. Yet search spending “only” grew by 13.2%, compared to 21% growth for display, and 23% growth for paid social. For 2020, online media spending will continue to climb — reaching $166.4 billion in spending, while offline media will reverse its decline and post a 2.3% climb this year (remember, Olympics and Elections) to $223.1 billion.

D, as in Data: Data spending also posted healthful growth in 2019 — up by 5% — with another 6.2% growth expected in 2020. Is data working harder for marketers — as in, increasing marketing efficiency? Possibly. Spending on offline data dropped 5.5% in 2019 — while spending on email data and analytics posted 22.4% growth, and spending on digital media data and analytics (other than email) grew by 14.4%. Yet businesses are wholly satisfied with their own level of “data-centricity.” Biegel says, “Organizations are slightly more ‘data-centric’ this year than when asked in 2017 — on the whole, industry data-centricity is not progressing as envisioned.”

marketing strategy
Source: IAB-Winterberry Group Data-Centric Org (2020)

What’s Driving Data Strategy at Businesses?

Beigel reports three primary facilitators:

  • A desire to deliver better customer experiences;
  • Heightened regulatory compliance requirements and need to honor consumer preferences; and,
  • Increased demand to better leverage both first- and third-party data assets.

With a data-for-marketing marketplace in the United States now valued — both offline and online —- at $23 billion, those are three very important drivers that marketing professionals needs to get right. Or else our C-suite credibility may be diminished.

Artificial intelligence also has benefited from this reverence for data. Beigel reports that $11 billion has been invested globally in AI in the past five years — with 80% of marketers seeing AI “revolutionize” marketing in the next five years. Much of this investment is set on drawing insights from both structured and unstructured data sources.

And Where Are There Lingering Concerns?

Besides enterprise command of data assets, which could go either superbly or not, there are other concerns — both macro and micro, Biegel reports.

U.S. economic growth will likely slow to 1.9%, with global growth at pronounced risk. Corporate earnings may disappoint — leading to tightened purse strings. Tariffs may be reduced – nation by nation, region by region — but to what immediate impact? In short, Biegel says, “Limited tailwinds indicate that growth must be earned or bought.”

Among offline media there will be pockets of growth — outdoor, shopper marketing, linear and addressable TV — though direct mail will only squeak growth, with radio, newspaper, and magazines continuing their declines (even as their digital counterparts grow).

Search, display, and social will continue to dominate online media spend — but less mature channels, such as influencer marketing, digital video, and OTT [over-the-top] streaming, and digital audio will post rapid growth from much smaller bases. That portends good times for online data — but is it all rosy?

marketing strategy
Source: Winterberry Group Spend Estimates (2020)

For example, are customer acquisition and retention costs, though, declining in these channels? It may be that media inflation will eat into marketing efficiency, particularly if “targeting” data gets less precise and, as a result, relevance gets more elusive. Privacy restrictions, while well-meaning, are not always implemented in such a way that serve best consumers. Still, only 16% of businesses have reduced their spending and reliance on certain kinds of data as a result of new and potential data privacy regulations, Biegel reports.

So, come December 2020, will all of these predictions and concerns bear out? That’s one of the reasons I attend Bruce Biegel’s Annual Outlook at DMCNY each year. As great a prognosticator as he is and as on-target as his business, data, and economic models are — he’s always close enough to the market to say where struggles remain, where the work of data-driven marketing is hard, where hiccups happen, and the like. These are all of the many micro and macro reasons that any best of times can go awry.

His January 2020 predictions are now in the books — and we will all be back again in January 2021 — barring any hiccups.

Think of Food Nutrition Labels. Now, There’s Audience Data Labeling

This summer — this “nutritional” label for commercially available audience data, which vendors, agencies, advertisers and publishers can use to understand the sourcing of targeting data and how it is prepared for market — is ready for marketplace use.

Last fall, I reported briefly on an industry initiative related to “data labeling” a bid to provide transparency of data sourcing for audience data used in digital and mobile marketing. DataLabel.org is an initiative of the Interactive Advertising Bureau (IAB) and the IAB Tech Lab. (At the time of inception, the Data & Marketing Association now the Data Marketing Analytics division of the Association of National Advertisers was also at the table.)

This summer this “nutritional” label for commercially available audience data, which vendors, agencies, advertisers and publishers can use to understand the sourcing of targeting data and how it is prepared for market is ready for marketplace use.  (From a June 27 IAB Tech Lab press release🙂

“Data transparency is a table-stakes requirement to ensure responsible and effective use of audience data and companies that provide consistent access to detailed information about their data will attract more business,” said Dennis Buchheim, EVP and general manager at IAB Tech Lab. “Taking part in the corresponding compliance program will further differentiate an organization, affirming their full commitment to the highest standards.”

Transparency in Data Sourcing Matters

I remember hearing IAB CEO Randall Rothenberg admonishing the ad tech ecosystem in early 2017 to get out of the “fake anything” business, and arguably the effects of fraud, brand safety, and other concerns have led many advertising and marketing professionals to scour their data sourcing, permissions, stacking, integrating, and statistical analyzing to make sure that an otherwise reputable company is not engaged with anything untoward on the data front.

DataLabel.org supports this objective, in part, and goes further.  While it does not assign a quality score to any particular data source, it does enable apples-to-apples comparisons in important areas, (Opens as a PDF) which inform where media dollars based on audience data are committed:

Data Labeling label
Source: DataLabel.org

Yes, it’s an agnostic nutritional data label for data sourcing. Through IAB et al, dozens of companies were part of a working group that led to the Data Transparency Standard, Version 1.0 (a PDF download] led by Meredith Digital, Lotame Solutions and Pandora, among its supporting cast.

Does ‘Table-Stakes’ Mean Traction? You Look Good Dressed, in Responsible Data

According to the IAB, “completion of the program requires an annual business audit to confirm that the information provided within the labelling is reliable, that the organization has the necessary systems, processes, and personnel in place to sustain consistent label completion at scale, and that a label can be produced for all in-market segments available. Engagements typically range between [two to five] months, depending upon the size and complexity of the company’s business.”

So now that’s the Data Label is available to the data-driven marketing marketplace, is there real traction to see its use?  From the data provider side, at least, I’d say so.  While some may be taking a wait-and-see approach, some data marketing companies are moving forward with data labeling and transparency certification.

“The digital ecosystem tends to focus on areas like inventory and traffic,” said Chris Hemick, senior product marketing manager, Alliant, whose company is now in the onboarding process. “Alliant is an advocate for bringing the same level of focus to the data marketplace. We firmly believe that IAB’s efforts to spotlight data provider practices around audience creation will be a positive for the entire industry.”

Another data provider, Audience Acuity, echoes these sentiments. “The concept of the Data Transparency Label was introduced in the fourth quarter of last year, after it was developed by the ANA’s Data Marketing Analytics (DMA) division, the IAB Tech Lab, the Coalition for Innovative Media Measurement (CIMM), and the Advertising Research Foundation (ARF),” said Riad Shalaby, CMO of Audience Acuity. “We are aligned with their perspective on this important topic, and we are delighted to be one of the first major data companies in the United States to provide this level of transparency.”

There are many things we, as data marketing professionals, need to concern ourselves with in best practices, ethics, and even legal compliance. Brand safety, ad measurement, piracy, privacy and security, and fake anything are among them. Proper data governance is related to all of these concerns. The more we spotlight our roles as stewards of and for data integrity, the better we can achieve marketplace confidence and trust in the very information that helps make brand-consumer engagement succeed.

What’s the Price on ‘My Data’? Let the Marketplace Set the Rate

A bipartisan bill in Congress would assign the U.S. Securities and Exchange Commission with the task of determining what consumer data is worth; at least when it comes to Big Digital giants. So what’s my data worth?

A bipartisan bill in Congress would assign the U.S. Securities and Exchange Commission with the task of determining what consumer data is worth; at least when it comes to Big Digital giants. So what’s my data worth?

On the face of it, having the government mirror the private sector, and recognize that consumer data is a valuable asset, is actually quite wise. Data is worth something — and accounting rules, risk management, capitalism, and a reverence for asset protection — all point to a need to understand data’s worth and secure it accordingly. But should the government come up with the arithmetic? Really? And why limit this to Big Digital … data drives all economy sectors!

If this is about commerce and productivity, and facilitating next-generation accounting and capitalism, then I’d be all gung-ho. If it’s about setting the stage for just being punitive, then perhaps we can and must do better.

Take privacy. I’m already getting click fatigue — with permission notices on every site I want to visit, as well as the apps I use, it’s no wonder people are questioning if laws like GDPR and CCPA really afford any meaningful privacy protection at all, as well-intended as they may be. Privacy is personally defined — though universal principles need apply. Again, I think we can and must do better.

Recognizing data’s value — as the fuel for today’s economy — means recognizing data’s limitless beneficial uses (and encouraging such uses and further innovation), while putting a no-go ring around unreasonable uses (like throwing elections).

Business Efforts to Calculate Data’s Worth

“My data” is a misnomer. On the data valuation front, we from the direct marketing world — purveyors of personally identifiable information (PII) — have been putting a price on data for years … and understand data’s value, intrinsically. Big reveal: It’s not about me. (Sorry, Taylor Swift.)

Worldata, for example, has been tracking list prices for decades, and dutifully reporting on this. In the world of direct response, there’s “sweat equity” in both response and compiled lists. For response lists, some enterprise built a list of customers (or donors). The value of that list is derived from the shared attribute those customers have – and not, as some privacy advocates would have it, with the sum of one individual after another appearing on that list. With compiled lists, observable data is harnessed and staged also for marketing use – providing a more complete view of prospects and customers. Again, the value is derived from the attributes that data subjects share.

Even in digital data driving today’s media placement for advertising (more accurately, audience placement) — the algorithms deployed in search, social, and display — the values of these formulae are derived from affinities in these proprietary calculations, much of it anonymized from a traditional PII perspective. Yes, there are lots of data — nearly $21.2 billion in U.S. trade alone — but it’s not hoarding; it’s being put to productive use — in effect, 1:1 at mass scale.

With any innovations, there are bound to be mistakes by good companies, and some bad players, too. But it’s amazing to see how the marketplace weeds these out, over time. The marketplace, in time, weeds out the wheat from the chaff. The industry comes up with brand safety, privacy, security, chain-of-trust, and other initiatives to help facilitate more transparency and control. And testing shows which data sources are timely and reliable — and which ones where data quality is in question.

Predict This: Data Unleashed for Responsible Use Unleashes Consumer Benefits

Recently, I heard a current federal official say that data may be fuel — but it’s not like oil. Oil is finite. Data, on the other hand, is a limitless resource — like fusion. And it can be replicated. In fact, he went on to say, the more it is shared for responsible data use, the more consumers, citizens, commerce, and the economy benefit. This is correct. The commercialization of the Internet, indeed, gave us today’s global Digital Economy — giving billions access to information where they are able to derive limitless benefits.

That’s why potential breaches of data do need to be risk-assessed, prevented, understood for a likelihood of harm — with data governance and employee training thoroughly implemented. That’s also why government should investigate significant breaches to detect lax practices, and to instruct enterprises how to better protect themselves from bad actors. Here, I can see a viable SEC role, where all publicly held companies, and privately held too, are called into question – not just one type of company.

Where privacy is concerned … don’t just divide Big Digital revenue by the number of users with social accounts — and start menacing on what data about me online may be worth. That immediately starts off with a false assumption, fails to recognize information’s exponential value in the economy, and denies the incredible social benefits afforded by the digitization of information.

The Digital Advertising Alliance (a client) conducted a study in 2016, and found that consumers assign a value of nearly $1,200 a year to the “free” ad-financed content they access and rely upon via digital and mobile. However, if they were forced to pay that amount – most would not be willing (or able) to pay such a premium.

This research shows why we need to protect and facilitate ad-financed content. But it’s part of a larger discussion. It’s about why the commercialization of the Internet has been a 25-year success (happy birthday, October 24) and we must keep that moving forward. As consumers, we all have prospered! Let’s start our discussion on data valuation here.

 

Don’t Be a Data Hoarder — Why Data Governance Matters in Marketing

They say data is an asset. I say it, too. If collected data are wielded properly, they can definitely lead to financial gains, either through a revenue increase or cost reduction. But that doesn’t mean that possessing large amounts of data guarantees large dollar figures for the collector. Data governance matters.

They say data is an asset. I say it, too. If collected data are wielded properly, they can definitely lead to financial gains, either through a revenue increase or cost reduction. But that doesn’t mean that possessing large amounts of data guarantees large dollar figures for the collector. Data governance matters, because the operative words in my statement are “wielded properly,” as I have been emphasizing for years through this column.

Plus, collecting data also comes with risks. When sensitive data go into the wrong hands, it often leads to a direct financial burden for the data collector. In some countries, an assumed guardian of sensitive data may face legal charges for mishandling sensitive data. Even in the United States, which is known as the “freest” country for businesses when it comes to data usage, data breach or clear abuse of data can lead to a publicity nightmare for the organization; or worse, large legal settlements after long and costly litigations. Even in the most innocuous cases, mistreatment of sensitive data may lead to serious damage to the brand image.

The phrase is not even cool in the business community anymore, but “Big Data” worked like a magic word only a few years ago. In my opinion, that word “big” in Big Data misled many organizations and decision-makers. It basically gave a wrong notion that “big” is indeed “good” in the data business.

What is “good,” in a pure business sense? Simply, more money. What was the popular definition of Big Data back then? Three Vs, as in volume, velocity and variety. So, if varieties of data in large volumes move around really fast, it will automatically be good for businesses? We know the answer by now, that a large amount of unstructured, unorganized and unrefined data could just be a burden to the holder, not to mention the security concerns listed earlier.

Unfortunately, with the popularity of Big Data and emergence of cloud computing, many organizations started to hoard data with a hope that collected data would turn into gold one day. Here, I am saying “hoarding” with all of the negative connotations that come with the word.

Hoarders are the people who are not able to throw away anything, even garbage. Data hoarders are the same way. Most datasets are huge because the collector does not know what to throw out. If you ask any hoarder why he keeps so many items in the house, the most common answer would be “because you never know when you need them.” Data hoarders keep every piece of data indefinitely for the same reason.

Only Keep Useful Data

But if you are playing with data for business purposes, you should know what pieces of data are useful for decision-making. The sponsor of any data activity must have clear objectives to begin with. Analysts would then find out what kind of data are necessary to meet those goals, through various statistical analyses and cumulative knowledge.

Actually, good analysts do know that not all data are created equal, and some are more useful than others. Why do you think that the notion of a Data Lake became popular following the Big Data hype? Further, I have been emphasizing the importance of an even more concise data environment. (I call it an “Analytics Sandbox.”) Because the lake water in the Data Lake is still not drinkable. Data must get smaller through data refinement and analytics to be beneficial for decision-makers (refer to “Big Data Must Get Smaller”).

Nonetheless, organizations continue to hoard data, because no one wants to be responsible for purging data that may be useful someday. Government agencies may have some good reasons to maintain large amounts of data, because the cost of losing or misplacing data about some terrorist activities is too high. Even in that case, however, we should collectively be concerned if the most sensitive data about us — such as our biometrics data — reside in some government agency’s server somewhere, without clear and immediate purposes. In cities like London or Paris, cameras are on every street corner, linked to facial recognition algorithms. But we tolerate that because the benefit outweighs the risk (so we think). But that doesn’t mean that we don’t need to be concerned with data breach or abuse.

Hoarding Data Gives Brands the Temptation to Be Creepy

If the data are collected by businesses for their financial gains, then the subjects of such data collection (i.e., consumers) should question who gave them the right to collect data about every breath we take, every move we make and every claim we stake. It is one thing to retain data about mutual transactions, but it is quite another to collect data on our movement or whereabouts, unilaterally. In other words, it is one thing to be remembered (for better service and recommendation in the future), but it is another to be stalked (remember “Every Breath You Take” is a song about a stalker).

Have you heard a story about a stalker who successfully courted the subject as result of stalking? Why do marketers think that they will sell more of their products by stalking their customers and prospects? Since when did being totally creepy – as in “I know where you are and what you’re doing right now” – become an acceptable marketing tactic? (Refer to “Don’t Do It Just Because You Can.”)

In fact, even if you do possess such data, in the interest of “not” being creepy, you must make your message more innocuous. For example, don’t act like you are offering an item because you “know” that the target looked around similar items recently. That kind of creepy approach may work once in a while, but let’s not call that a good sales tactic.

Instead, sellers should make gentle nudges. Don’t say “I know you are looking for this particular skin care item.” The response to that would be “Who the hell are you, and how do you know that?” Instead, do say “Would you be interested in our new product for people with sensitive skin?” The desirable response would be “Hey, I was just looking for something like that!”

The difference between a creepy stalking and a gentle nudging is huge, from the receiving end.

Through many articles about personalization, I have been emphasizing the use of model-based personas, as they pack so much information in the form of answer to questions and cover the gap of missing data (as we’d never know everything about everyone). If I may add one more benefit of modeling, it coverts data into probabilities. Raw data is about “I know she is looking for a particular high-end skin care item,” where coverage of such data is seriously limited, anyway. Conversely, model scores are about “Her score for high-end beauty products is 8 out of 10 scale score,” even if we may not even have concrete data about that specific interest.

Now, users who only have access to the model score — which is “dull” information, in comparison to “sharp” data about some verified behavior — would be less temped to say “Oh, I know you did this.” Even for non-geeky types, the difference between “Is” and “Likely to be” is vast.

If converting sharp data into innocuous probability scores through modeling is too much for you to start with, then at least categorize the data, and expose data points to users that way. Yes, we are living in the world of SKU-level product suggestion (like Amazon does), but as a consumer, have you ever “liked” such blunt suggestions, anyway? Marketers do it because such personalization does better than not doing anything at all, but such a practice is hardly ideal for many reasons (Being creepy being one. Refer to “Personalization Is About the Person”).

The saddest part in all this is that most marketers don’t even know how to fully utilize what they collected. I’ve seen too many organizations that are still stuck with using a few popular data variables repeatedly, while hoarding data indiscriminately. Why risk all of those privacy and security concerns, not to mention the data maintenance cost, if that is the case?

Have a Goal for All of That Data

If analytics is part of the process, then the analysts will tell you with conviction, that you don’t need all those data points for certain types of prediction. For instance, why risk losing a bunch of credit card numbers, when the credit card type or payment method is all you need to predict responses and propensities on a customer level?

Of course, the organization must first decide what types of models and predictions are necessary to meet their goals. But that is the beginning part of the whole analytics game, anyway. Analytics is not about answering to some wishful thinking of data hoarders; it should be a goal-oriented activity, with carefully selected and refined data for clear purposes.

A goal-oriented mindset is even more important in the age of machine learning and automation. Because we should never automate bad behaviors. Imagine a powerful marketing automation engine in the hands of data hoarders. Forget about organizational inefficiency. As a consumer, don’t you get a chill down your spine just imagining how creepy the outcome would be? Well, maybe we don’t really have to imagine it, as we all get bombarded with ineffective and not-so-personal offers every day.

Conclusion

So, marketers, have clear purposes in data activities, and do not become mindless data hoarders. If you do possess data, wield them properly with analytics. And while at it, purge pieces of data that do not fit your goals. That “you never know” attitude really doesn’t help anyone. And you are supposed to know your own goals and what data and methodologies will get you there.

Data Privacy Policymaking Words of Warning of Europe

Two weeks back, two hearings in Congress were held about a possible forthcoming new federal data privacy law for the United States. Some of the testimony included fascinating insight.

Two weeks back, two hearings in Congress were held about a possible forthcoming new federal data privacy law for the United States. Some of the testimony included fascinating insight.

It’s been nearly nine months since the European Union’s (EU) General Data Protection Regulation (GDPR) took effect with its tentacle effects worldwide – and it is helpful to look at what has transcribed, and to avoid making GDPR’s mistakes. That’s what one of the witnesses, Roslyn Layton, visiting scholar, American Enterprise Institute, had to say to the House Committee on Energy and Commerce, Subcommittee on Consumer Protection and Commerce, in her statement titled “How the US Can Leapfrog the EU.”

GDPR’s Early Impacts Are Foreboding

From Dr. Layton’s testimony, I found these excerpts (footnotes removed) to be particularly insightful – and somewhat frightful, though some of it predictable. She examined GDPR’s early deleterious effects which we, in the United States and elsewhere, would be wise to reject:

GDPR Is Not about Privacy  It’s About Data Flows

“A popular misconception about the GDPR is that it protects privacy; it does not. In fact, the word ‘privacy’ does not even appear in the final text of the GDPR, except in a footnote. Rather, the GDPR is about data protection or, more correctly, data governance. Data privacy is about the use of data by people who are allowed to have it. Data protection, on the other hand, refers to technical systems that keep data out of the hands of people who should not have it. By its very name, the GDPR regulates the processing of personal data, not privacy.”

GDPR Has Only Concentrated Big Digital Since Taking Effect

“To analyze a policy like the GDPR, we must set aside the political pronouncements and evaluate its real-world effects. Since the implementation of the GDPR, Google, Facebook and Amazon have increased their market share in the EU.”

GDPR Has Decimated Small- and Mid-Sized Ad Tech

“One study suggests that small- and medium-sized ad tech competitors have lost up to one-third of their market position since the GDPR took effect. The GDPR does not bode well for cutting-edge firms, as scientists describe it as fundamentally incompatible with artificial intelligence and big data. This is indeed a perverse outcome for a regulation that promised to level the playing field.”

GDPR Raises Costs, Prohibitively Acting as a Trade Barrier

“To do business in the EU today, the average firm of 500 employees must spend about $3 million to comply with the GDPR. Thousands of US firms have decided it is not worthwhile and have exited. No longer visible in the EU are the Chicago Tribune and the hundreds of outlets from Tribune Publishing. This is concerning because the EU is the destination of about two-thirds of America’s exports of digital media, goods and services. Indeed, the GDPR can be examined as a trade barrier to keep small American firms out so that small European firms can get a foothold.”

GDPR Denies Valuable Content to European Citizens

“Of course, $3 million, or even $300 million, is nothing for Google, Facebook and Amazon (The Fortune 500 firms have reportedly earmarked $8 billion for GDPR upgrades.), but it would bankrupt many online enterprises in the US. Indeed, less than half of eligible firms are fully compliant with the GDPR; one-fifth say that full compliance is impossible. The direct welfare loss is estimated be about €260 per European citizen.”

What if the US Enacted GDPR Here … Oh, the Costs

“If a similar regulation were enacted in the US, total GDPR compliance costs for US firms alone would reach $150 billion; twice what the US spend on broadband network investment and one-third of annual e-commerce revenue in the US.”

Dr. Layton, in her testimony, also questioned the California Consumer Privacy Act, which may create even more enterprise requirements then GDPR. She suggested more pragmatic paths need to be forged.

A Better Way Privacy by Design

“Ideally, we need a technologically neutral national framework with a consistent application across enterprises. It should support consumers’ expectations to have same protections on all online entities. The law should make distinctions between personally identifiable information which deserves protection, but not require same high standard for public data, de-identified, and anonymized data which do not carry the same risks. Unlike the GDPR, the US policy should not make it more expensive to do business, reduce consumer freedom or inhibit innovation.”

Data ‘Seat Belts and Air Bags’ for Privacy

In a second hearing, before the Senate Committee on Commerce, Science and Transportation, Interactive Advertising Bureau (IAB) CEO Randall Rothenberg provided a spirited statement of data’s role in the U.S. economy and the benefits that continue to accrue. He, too, drew from an another industry’s history which he believes offers a helpful analogy and cooperative blueprint:

IAB CEO Randall Rothenberg | Credit: Photo: Chet Dalzell

Internet’s Profound Communication Power

“The Internet is perhaps the most powerful and empowering mode of communication and commerce ever invented. It is built on the exchange of data between individuals’ browsers and devices, and myriad server computers operated by hundreds of millions of businesses, educational institutions, governments, NGOs, and other individuals around the world.”

Advertising’s Essential Role Online Much of It Data-Driven

Advertising has served an essential role in the growth and sustainability of the digital ecosystem, almost from the moment the first Internet browsers were released to the public in the 1990s. In the decades since, data-driven advertising has powered the growth of e-commerce, the digital news industry, digital entertainment, and a burgeoning consumer-brand revolution by funding innovative tools and services for consumers and businesses to connect, communicate and trade.

The Indispensable Ingredient: Trust

“Central to companies’ data-fueled growth is trust. As in any relationship, from love to commerce, trust underlies the willingness of parties to exchange information with each other; and thus, their ability to create greater value for each other. The equation is simple: The economy depends on the Internet; the Internet runs on data; data requires trust. IAB strongly believes that legislative and regulatory mechanisms can be deployed in ways that will reinforce and enhance trust in the Internet ecosystem.”

Universal Truth: Consumer Data Is Good

“We recommend Congress start with a premise that for most of American history was self-evident, but today seems almost revolutionary: consumer data is a good thing. It is the raw material of such essential activities as epidemiology, journalism, marketing, business development, and every social science you can name.

The Auto Industry Offers Us a Proactive Model

“We believe our goals align with the Congress’ decision to take a proactive position on data privacy, rather than the reactive approach that has been adopted by Europe and some states. We believe we can work together as partners in this effort with you to advance consumer privacy. Our model is the partnership between government and industry that created the modern concept of automotive safety in the 1960s. Yes, the partnership began as a shotgun wedding. Yes, the auto industry resisted at first. But an undeniable consumer right to be safe on the highways met well-researched solutions, which the Congress embedded in well-crafted laws that were supported by the states.

Auto Safety and Digital Wellness

“The result has been millions of lives and billions of dollars saved. We believe the analogy holds well here. Americans have a right to be secure on the information superhighway. Well-researched solutions and well-crafted laws can assure their ‘digital wellness.’ We should be thorough, practical and collaborative. Our goal should be to find the three or five or 10 practices and mechanisms the seat belts and air bags of the Internet era  that companies can implement and consumers can easily adopt that will reinforce privacy, security and trust.”

Notice and Choice Bombardment Or Predictable Rules of the Road

“Together, based on our members’ experience, we can achieve this new paradigm by developing a federal privacy law that, instead of bombarding consumers with notices and choices, comprehensively provides clear, even-handed, consistent and predictable rules of the road that consumers, businesses and law enforcers can rely upon.

One Federal Standard in Harmony

“Without a consistent, preemptive federal privacy standard, the patchwork of state privacy laws will create consumer confusion, present significant challenges for businesses trying to comply with these laws, and ultimately fall short of consumers’ expectations about their digital privacy. We ask the Congress to harmonize privacy protections across the country through preemptive legislation that provides meaningful protections for consumers while allowing digital innovation to continue apace.”

It is worth reading the testimonies of the privacy advocates present at these two hearings, as well. These GDPR fans have many sympathetic voices in the media and Congress, and truly need to be part of any conversation where consensus ought to be built. It is my hope the right federal legislation will result. The early evidence from Europe where advocates won over reason portends the punitive risks of getting it wrong.

5 Things ’60 Minutes’ (Intentionally) Didn’t Tell Americans About Data Brokers

Kids, “60 Minutes” is no longer U.S. broadcast journalism at its former best—it’s pseudo-infotainment. Frankly, correspondent Steve Kroft and company had their own point of view that they wanted to report to whip up hysteria, and it wasn’t part of any of the data-driven advertising ecosystem that anyone of us practitioners recognize. Here’s what I know—that I want every consumer to know—and what CBS and “60 Minutes” should have told its viewers:

Kids, “60 Minutes” is no longer U.S. broadcast journalism at its former best—it’s pseudo-infotainment.

The Direct Marketing Association, my editor at Target Marketing, our friends at Direct Marketing News and The Magill Report were spot on with their responses.

Frankly, correspondent Steve Kroft and company had their own point of view that they wanted to report to whip up hysteria, and it wasn’t part of any of the data-driven advertising ecosystem that anyone of us practitioners recognize. Bryan Kennedy of Epsilon did yeoman’s work: Self-regulation exists because all marketers know that data is the currency of our livelihood, and consumer trust underpins us all.

Here’s what I know—that I want every consumer to know—and what CBS and “60 Minutes” should have told its viewers:

1. You Can Opt Out
For decades, Americans have had numerous free ways to “opt-out” of the data-sharing-for-marketing-use marketplace—and millions upon millions of Americans have taken advantage of these free industry-offered programs:

  • DMAChoice, offered by DMA, allows industry-wide opt-out of prospect direct mail, email, do-not-call (for selected states) and unaddressed mail delivery.
  • Nearly all consumer brands also offer their own preference centers and in-house suppression lists on their Web sites and Privacy Policies—both for do-not-send and for do-not-share, bridging multiple channels. Many business brands also do the same.
  • More recently, the Digital Advertising Alliance and its Consumer Choice Page provides an industry-wide opt-out mechanism for targeted display ads online that are served (in a de-identified basis, by the way) based on browsing behavior. Consumers can harden their choices against cookie removal once each opt-out choice is made.
  • A similar opt-out mechanism for mobile interest-based advertising from DAA is now in the works.

2. Marketing Data Is Used for Marketing Only
Every code of conduct and every ethics guideline in our business states this clearly. Furthermore, firewalls exist between marketing data (our business’s data sources) and individual referential data (information used for private investigation, employment, credit, insurance eligibility). If “60 Minutes”—or a consumer, or anyone else for that matter—has evidence that a marketer or service provider is sharing, renting or selling marketing data for non-marketing uses, the DMA’s Committee on Ethical Business Practice would want to be first to know—so as to investigate and bring any organization into compliance. Hypotheticals and inferences are not reality, despite the innuendoes used by Kroft.

3. Sensitive Data Are Already Regulated
Areas of sensitivity that most consumers care about—personally identifiable data related to their children, financial data, health information, credit data and a few other categories—are already regulated under federal law. Marketers must adhere to these laws and regulations.

4. Fraud Is Not Marketing
Another sensitive area—where and when marketing data is breached with a likelihood for fraud—you’ll find that most marketing organizations indeed want one national standard (not 50 plus one) for how consumers are notified and what protections they are afforded. Fraud prevention—as well as data governance and data stewardship—is a heightened priority for all businesses and organizations that rely on consumer information.

5. Data Benefits Customers
Data used for marketing purposes should be a government concern: not on how to stop it—but how to promote it, both domestically and globally, to benefit consumers and the economy. On the whole, consumers demand relevance. They demand recognition. They crave personalization. And every day—millions of times a day—they vote with their wallets: They shop, they donate, they subscribe, they raise their hands, all based on their participation in commerce. Marketing data also enables competition and the innovation and variety of choices consumers enjoy. As DMA has ably documented, marketing data exchange generates sales, jobs and tax revenue—and, might I add, satisfied consumers. Yes, we need consumer protection from fraud, bad players and unfair and deceptive practices—but “our data-driven economy” is a hugely wonderful default.

Which begs the question: Where is the harm, “60 Minutes”?