How do you differentiate the best data providers from among the rest?
“Diversity of sources is a key measuring stick. Most data providers have a small number of sources or types of data that fuel their offerings. Demographics and lifestyle-type data is ubiquitous in the industry, so there are hundreds of providers who offer that. There are also hundreds of providers that specialize in niche areas like life event or social media signal data. However, the best data partners build their products from a wide and diverse variety of types of data. Partners whose data solutions are truly superior are those that incorporate individual-level transaction data. These signals are the most powerful for predicting the future spending behaviors of your customers and prospects.”
How do data providers’ methods differ when it comes to engineering their enhancement data?
“Not all data products are created equal—even if they’re built from comparable data from similar sources. There are many different approaches that providers take in bringing their offerings to the market. Some simply white label or license another provider’s assets. Some use rudimentary matching techniques to cobble together a product from a few sources. Some are actively working to minimize the cost associated with building data products, resulting in fewer inputs, lower coverage, and less value for their clients.”
“The best data partners have built robust ‘data factories’ with massive identity graphs underpinning their solutions. They invest in acquiring data from diverse sources and have sophisticated logic for bringing all of this information together in meaningful ways. These leading companies also use machine learning, AI, and predictive data science to analyze the data and create highly valuable, unique data elements that their clients can use to solve a number of marketing challenges.”
The discussion in the data marketplace is turning to quality over quantity. How does the choice of a data partner reflect that?
“As a marketer looking for the best data partner, you should act as if you’re from Missouri, ‘The Show-Me State.’ That’s to say, when a potential partner says ‘our data is the best for you,’ your answer should be, ‘Show me.’ The best data partners are receptive to tests and scrutiny. Quality in the data world has a number of dimensions, including accuracy, recency, coverage, and match rates. When choosing a data provider, it is important to evaluate each of these dimensions thoroughly. This usually entails sending over a portion of your customer records, letting the partner perform their match and append, and then taking a period of time to analyze the data. The savviest marketers employ the use of ‘truth sets’ to compare a known population to the data that the partner has appended. They look at element fill rates for coverage gaps. Many data-driven marketers will rebuild existing models—acquisition, prospect, lapsed, cross-sell/upsell—to understand the lift gained by acquiring the data. It’s a rigorous process that results in better business decisions. The best data partners will not shy away from this type of testing and validation.”
Any final thoughts as you reflect back on three decades in the data business?
“Understanding people in a deeper way across multiple dimensions has never been more critical to marketing success. Brands have gotten the memo about growing first-party data, and they are responding in creative ways. But it has also never been more important to enhance that information with third-party data from reputable data partners. And…if you’re looking for a data partner that checks all the boxes above and then some, please reach out to me. I know a provider that fits the bill.”