Value of Data

A subject being debated at the moment at the DMA (I sit on the DMA North Council) is the value of data.  

Brands have had a place on the company balance sheet for a numbers of years now. One of the most influential measures of the value of a brand comes from Interbrand who define brand valuation with three key components: The

  1. Financial performance of the branded products or services

  2. Role the brand plays in purchase decisions

  3. Brand’s competitive strength.

So why not data on the balance sheet?

Should we place a value on the size of the database, or the customer details it holds, or an organization’s capabilities in using it. In my world of CRM it is second nature to place a value on an email address or a customer’s lifetime value. Value can also be derived from the CRM data itself to generate sales as anyone who received easyJet’s anniversary email from a couple of years ago would remember or who get the Trip Advisor email informing you that you are in their top 10%. 

Of course, value can also be viewed in another way. With the recent GDPR coming into force, organizations need to understand the implications of not having their data and systems in order. Data breaches are getting bigger and bigger (Are you one of the Facebook 50 million?)

 No matter how you value it, data is the lifeblood of most organizations. 

Which then suggests we need to answer the question as to what is the value consumers should place on their data? 

We all know that there is no such thing as a free lunch, and that the so-called free services we get from Google, Amazon, Hotmail come with a hidden cost. Whether we realize or not (and we do realize it don’t we?), there is an exchange taking place. We get free search/email/shopping experiences in exchange for our data. This exchange is vital to the economies of the aforementioned brands. Its estimated that Facebook collects $240 from every American adult. This estimate was made by Wibson, a decentralized data marketplace that provides individuals a way to securely and anonymously sell validated private information in a trusted environment. 

So, what if brands changed their model and put a tangible price on your data. Not so far fetched. Shiru a Japanese coffee chain  provides free drinks to university students in exchange for personal data that they share with companies interested in hiring those student. In fact, according to Shiru’s website  ‘We have specially trained staff members who give students additional information about our sponsors while they enjoy their coffee’’

 Who would have thought that one pillar of the cashless society would be one in which the exchange of data would play a part

ePrivacy Directive: combining modern marketing and privacy

I was invited to attend a debate hosted by FEDMA on the future of ePrivacy and held at the European Parliament in Brussels on February 8th.

The event, ePrivacy Directive: combining modern marketing and privacy was hosted by Member of the European Parliament, Axel Voss.

Claire Bury, Deputy Director General of DG CNECT, at the European Commission set up the session by outlining the EU’s intention to align the ePrivacy directive with the recently adopted GDPR ( General Data Protection Regulation). ( Learn more about GDPR on the DMA’s website )

For those of you not in the know..this is Directive is more commonly known as the Cookie Directive.

In the first panel, ePrivacy: the right balance between business & buyers, Wojciech Wiewiórowski, Deputy European Data Protection Supervisor and Harald Lemke, Senior Vice President, Special Representative for e-government and e-justice at Deutsche Post DHL shared their views on what should be the focus of the ePrivacy Regulation proposal. Although everyone agreed that yes, the  confidentiality aspects of the ePrivacy Directive should be respected there was a disagreement on its impact on the growing digital and data economy in Europe. Mr Lemke, obviously representing the commercial world’s interests warned against implementing the Directive without first studying its impact on this economy. Bizarely Mr. Wiewiórowski claimed he had not seen any studies that flagged any impact on the industry (I’m not aware of any that having been commissioned)

Mr. Wiewiórowski also stressed his optimism that the Directive could be introduced in time to mirror the introduction of GDPR in May 2018. This not created a wave of sceptical smiles through the audience but also prompted Mr Lemke to flag that his legal team were so busy with GDPR that he doubted that they could then also cope with ePrivacy

Some mention was made of research carried out by the Norwegian national data protection authority, which found that consumers prefer random versus targeted advertising when given the choice. Although I’m not sure how much weight this should carry considering the maturity of the data and direct marketing in Norway.

Diana Jannsen from the Dutch DMA, presented some highlights from their recent study What consumers think about data. Interestingly one highlight is that 75% of consumers are willing to share data, but 89% of them state that business currently benefits most. The study is available to download in English here

In the second panel ,Judicael Phan, Senior Counsel at Criteo presented the different technical tools that already exist on the market to provide users with ways to express their preferences and in fact made a very strong case for how being much more transparent about the use of data can provide a business advantage

What’s the difference between a Directive and a Regulation? A regulation means that each of the member states in the EU must adhere to the exact same laws and ways of implementing them. Whereas each country in the EU can implement whatever version of a directive works best for their individual markets – usually a reflection of the maturity of that market

The annoying banner pop-ups that appear on any website we visit, asking for consent to collect cookies? That was the product of the last (and existing) EU cookie directive update. The new Directive actually drops these banners – as they are annoying – but actually then essentially insists that anyone who wants to drop cookies onto a device will need to go through more hoops to collect permission. More banners anyone?

And it’s not just websites – messaging apps also get roped into the new legislation! This Guardian article gives you a flavour

As mentioned above, the EU aim to get this place alongside GDPR in May 2018

To really feel your customers' pain, you have to stand right by their side

I’m going to make a bet with you. At some point last summer the sun properly came out (no, really), and the mercury started to rise. When it did, sales of ice cream started to rise. As it got hotter, they continued to rise… until, at about 25.3C, when they suddenly plateaud, before falling steadily as the temperature continued its hypothetical march towards the traditional “London hotter than place X!” headlines.

Why am I so sure? Big data tells me so.

Now, as Zone’s head of CRM, you might expect me to tell you that – as big data can tell you everything. However, I’m happy to admit that it can’t tell me why ice cream sales plateau at 25.3C, because it doesn’t know. You actually have to speak to people to understand the real-world dilemma that prompts this behaviour (apparently, this is the temperature at which concerns over melting outweigh a craving for refreshment).

Big data is incredible: it can help us map out customer journeys in a granular way, particularly when thinking about online experiences. But often the problem the consumer is trying to solve occurs offline, leaving a disconnect between the pain point and the big data. To bridge that disconnect, you have to talk to the customer – and that’s when you might find an opportunity.

Take washing powder. Retail sales data tells me that washing powder is bought on specific days early in the week (possibly after a weekend of multiple washes), or simply once a month when consumers do their big non food-related shops.

OK, fine – but now personalise it. If you’re like me, you realise that you have run out while standing at the washing machine (the dilemma). Standard operating procedure in the Cuzziol household is to jot it down on the shopping list ready for the next Waitrose order… and thus contribute to that standard big data analytic.

But in that pain point, there was an opportunity to bypass the shopping list. An obvious e-commerce solution might come in the form of a simple one-step order interaction with my mobile. But I don’t keep my mobile in my pocket when I’m at home. What I need is an ever-present, dedicated digital solution present at the pain point – such as Amazon’s Dash buttons.

The identification of these dilemmas – and their solutions – happens when we get closer to the customer than big data might allow. Essentially a kind of ethnography, it’s about gaining insight just by being with consumers, in their own environment, as they perform tasks. Focus groups and surveys can ask these questions, but don’t happen where the real action takes place – and are unlikely to discover that I actually don’t have my smartphone with me next to the washing machine.

We can use all the web analytics data to describe the journey a consumer takes when trying to make a purchase on an e-commerce platform, but it’s only by sitting with them and recording their struggles with the credit card section of a checkout that we get a richer understanding of what’s going on.

That’s why we place such a premium on user research, observing them on their digital journey to observe where the speed bumps are, and working on ways to smooth them out… even to the extent of mapping people’s facial expressions to the movements of a mouse on a test screen. A grimace, for example, can be an incredibly valuable data point.

Yes, big data can get us closer to customers, but we only get really close to them when we are literally close to them… and can share the pain point.

First published via the DMA