8 MARKETING INSIGHTSMAY/JUNE 2015

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SO Expert commentary on industry topics BY MARY M. FLORY

THE LAYERED LOOKYour customers have a history that doesn’t involve you, but it affects you. Digital data co-ops offer the chance for marketers to immerse themselves in second-party data, allowing them to see customers through a wholly different lens.

“OK, I get it,” you’re saying to yourself: “There’s lots of data out there.” But what you might not fully realize is that, oftentimes, your internal data will work hardest for you only once it’s coupled with second-party data.

It’s not so much about the grass being greener on the other side of the fence, it’s about knocking that fence over so all relevant—and disparate—data can mingle and inform new business strategies. Digital data cooperatives are a current solution to the marketer’s dilemma of just how much she should care about her current and potential customers’ interactions with other brands, providing second-party data to fill in first-party data gaps, according to a recent Forrester Consulting study, titled “Leverage a Data Cooperative for Deeper Customer Insights and Better Business Outcomes.”

“Marketers are simply leveraging online marketing strategies more and more—particularly programmatic [ones]—and the need for data that works at scale is only getting more acute,” says Jacob Ross, president of Adroit Digital, the New York-based performance marketing technology company that commissioned the Forrester study.

So are data cooperatives the future of marketing? Should marketers make joining digital data co-ops a priority? We asked three industry leaders—a practitioner, an academic and a researcher—to weigh in.

KIM EVENSON

CHIEF MARKETING OFFICER, LEGACY.COM

“I’m not sure that’s the right question. I think the past and the future of great marketing is driven by a really deep understanding of your [customers]. … First-party data is fantastic because it helps you understand how people interact with your brand. Second-party data, whether through a formal co-op or just working with a partner, helps you be less myopic, and from it you can start to understand your user in a broader context. … However the marketer approaches it, the tools alone will not produce the win. It is the visceral understanding that allows the marketer to think like their audience that moves the needle. And if we use co-op data to drive that understanding, then it will leave a very big mark on the industry.”

CATHERINE GARNETT

RESEARCH STRATEGIST, REDPEPPER

“To attract new customers, retail brands need insights about the bigger picture overall, and the aggregated consumer information that data co-ops can provide can offer an effective solution. Brands are now capturing real-time data about consumers that can be used to drive sales and engagement in the moment. For example, Target’s recent customer issues with their Lilly Pulitzer product launch were blamed, in part, on using data that was six months old rather than more current information to predict Web traffic and demand. In the future, real-time data will gain importance over historical data. To continue to be an effective partner, data co-ops will need to bridge the gap between real-time data and historical data.”

9MARKETING INSIGHTSMAY/JUNE 2015

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NOT YOUR MAMA’S DATA CO-OP

The origins of data co-ops can be traced back to mail-order catalogs, according to a recent Forrester study

A data cooperative “is an online pool of shared shopper data, as well as shared first-party digital data from other brands/publishers,” as defined by a recent Forrester Consulting study that was commissoned by Adroit Digital.

Jacob Ross, Adroit Digital’s president, offers up another way of thinking about it: “An online co-op could also be described as an aggregated pool of shared data, provided by members of the co-op, in return for use of all the data and services around a co-op, or in some cases, a revenue stream for data utilized by other co-op members.

“There is a rise in huge ‘walled gardens’ of data,” he adds. “Facebook, Amazon, Wal-Mart: These companies are certainly making it easy for marketers to reach their customers, but without the credible, open data-sharing environment that co-ops can provide, smaller marketers are simply feeding the top 1% of data giants.”

Benefits from a layer of second-party data include reaching target audiences efficiently and with the right message, driving deeper engagement and boosting ROI, according to the report. In fact, 42% of respondents who currently use a data co-op reported better marketing ROI, and 46% cited improved customer experience as a result. Further, 71% of respondents expect moderate to significant revenue growth, and 76% expect to gain financial efficiency in the first year.

Marketer appetite for data is growing at a fast clip, says Paolo DiVincenzo, the general manager of data at Adroit Digital, because marketers are recognizing the importance of data in driving effective strategies, and data-leveraging tools are becoming more accessible. “With the ‘give-to-get’ model of co-ops being hard to beat economically, co-ops are poised to be the go-to source for this new demand. These factors bode well for a bright long-term future for co-ops.” MI

RAJ SETHURAMAN

MARILYN AND LEO CORRIGAN PROFESSOR AND CHAIR OF MARKETING, SOUTHERN

METHODIST UNIVERSITY’S EDWIN L. COX SCHOOL OF BUSINESS

“From an academician’s perspective or from an analytical, insights-generation perspective or simply from the point-of-view of customer servicing, I would say it’s a boon for the future. I’m very optimistic. I hope that the data cooperation [movement] grows instead of being a passing phase, and that it becomes routine, integrated into both data warehousing and data collection, as well as data management and the generation of insights.”