Why a third-party data cull benefits marketers and data suppliers alike

An ever-growing quantity of third-party data is available to marketers and advertisers, however, there is often a lack of transparency or clarity into the audience overlap between sources. And, with regulations such as GDPR being enforced, some are beginning to wonder whether they will stifle the growth of the data industry. Greg Herbst, our VP of Audience Solutions here at Bombora, asserts that legislations were not the prompt for a data cull taking place amongst suppliers; in fact, a more selective approach is on the rise, and actually benefits all parties involved.

Some giants have bet big on data through mergers and acquisitions that combine data assets across all constituents. Others, such as Bluekai’s “Little Blue Book” and LiveRamp’s partner directory, compile lists of all available data suppliers in an effort to increase data usage. At a certain point, however, the third-party data space became oversaturated and quality concerns surfaced.

Greg Herbst declares that third-party data actually began undergoing some changes long before legislations were enforced.  Underutilized and largely overlapping segments have been trimmed from data marketplaces. While this may appear on the surface as a diminishment of supply, it’s in fact a positive move for both data providers and advertisers.

There are several benefits to each party that data trimming shepherds, claims Herbst. For one, it helps to eliminate duplication. Amongst the tens of thousands of pre-built segments available across all third-party data providers, there is bound to be overlap. What’s more, there is very little chance that each one will garner a return on costs incurred for the marketplace that sells these segments. Additionally, cutbacks will help tremendously with server costs.

Lastly, and arguably the most important way that a data cull benefits the industry, is that it enforces quality over quantity. Upkeep of segments that perform the best and trimming of those that underperform will distinguish the “preferred” from the stragglers.  

“Culling data segments is ultimately a push toward quality. Just as publishers cut down on their available inventory to deliver cleaner pages with more impact per ad unit, data marketplaces must now limit their offerings to effective, high-quality data segments that deliver marketing and sales lift,” says Herbst.

Continuing discussion around data demand, legislations, and quality is proof in itself that third-party data providers are here to stay. The survivors will be those who provide increased quality and supply of "the preferred".

^{Parts of this post were first published on MediaPost.}