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Data-driven advertising will change in 2018: The net positive effect of GDPR and transparency

January 19, 2018 | By Eric Marterella, CRO— Lotame @emarterella

Spend on data-driven advertising is surging as brands continue to realize the benefits of more granular and personalized campaigns. However, the way the advertising industry uses, captures, and analyzes consumer data will change dramatically in 2018. And that will impact just about everything.

Here are two big changes on the horizon that are posed to significantly impact digital advertising:

GDPR is coming – and that’s OK.

In May, GDPR will go into effect. And with it comes new rules surrounding digital data collection. Now, EU audiences will have more control over how their personal information is indexed and used.

In the ad industry, reception to this new regulation has generally been negative. Brands and agencies rely on consumer data to develop personal – and ultimately successful –  advertising experiences. GDPR, however, will treat anonymous and personal data identically, which could have a major impact on ad experiences for consumers in the EU. What’s more, there are significant compliance costs that come with GDPR. Those who don’t obey will face fines, which could amount to as much as 4% of global revenue.

Now, while these new guidelines could cause some early problems for advertisers, GDPR will also bring with it key long-term advertising benefits. For example, GDPR raises the bar for opt-in data collection. While this will reduce the scale of data collected, it will dramatically raise the quality. This means better ad experiences for consumers and stronger ROI. More marketers will realize this as we get closer to the launch date.

Second-party data is king in 2018 ad transparency.

Second-party data was all the rage in 2017 and that will continue this year as well. Essentially, second-party data is someone else’s first-party data that you access directly from them. There is no data aggregator or other “middleman” in the exchange of second-party data. Through a direct relationship with the owner of the first-party data, you can define exactly what data is being bought or sold, the price of the data, and any other commercial terms.

The possibilities with second-party data are endless. Advertisers can choose the data sources they feel are most relevant to their campaign optimization, filtering out all the unnecessary stuff. This is where you can take data-driven marketing to a place that is not only unique, but extremely efficient. And what second-party data may lack in “scale,” it makes up for with precision.

In 2018, second-party data will explode in demand, driven by advertiser calls for transparency and clarity in the data they use. By cutting out the middle-man, marketers can go directly to companies that they know will have the most important or high-quality data. The data is unique and a direct relationship is in place, so quality is never an issue.

With GDPR looming and transparency still an evolving battle, 2018 promises to be an interesting year for advertising data. The industry is changing – and while some aspects of data collection and activation will become harder, as a result, at large, GDPR and the shift towards second-party data are likely to enable a new depth of data quality. That’s a good thing.

As Lotame’s Chief Revenue Officer, Eric Marterella is responsible for overseeing all revenue-focused and client retention initiatives worldwide. Since procuring his degree from Virginia Polytechnic, Eric Marterella has garnered sales leadership experience in various industries for over eighteen years at companies including Digex, AT&T and Cisco. Most recently, Eric served as a Global Vice President at Sprinklr, where he was instrumental in the company’s growth from $20M to a $1.8B valuation. Eric is a co-chairman of a monthly executive leadership forum called The Leadership Breakfast.

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