By: Jessica Tran

The current “big data gold rush” we’re living in has seen its value literally surpass the price of oil – it’s unprecedented.

However, as the industry rushes to collect more and more data for our data-driven strategies, many forget that the quality of our strategies and insights are only as good as the validity of the data itself. To complicate things further, the shifting privacy and regulatory environment is introducing more uncertainty into the third-party data landscape.

Here’s what you need to think about before you invest in data as a client, an agency and a consumer.

For clients, it’s important to establish if your data can be trusted – to do so, the sources must be vetted, analyzed and questioned thoroughly. Are the data sets provided by a credible source? How is it collected and how fresh is the data? What signals are being used to dictate the composition of the data?

Often, this basic due diligence is not followed. And, beyond establishing the validity of the data, it’s important to conduct a deep-dive into the make-up of your data-sets – allowing you to focus on the signals that are most relevant to your business. For example, if you’re marketing to a mid-market auto intender, targeting luxury car intenders likely isn’t a good use of your spend – but that’s what can happen when not focusing on the right factors in a data set.

For agencies, even once you’ve answered where your data is coming from, and what it’s made of, the ultimate test is performance. Testing should be a foundational part of your strategies. This is the only way to understand the types of data that drive the most effective outcomes for
your clients: continuously test different hypotheses to identify new opportunities to leverage data and uncover new audiences. Who knows? Maybe consumers who are interested in curling do have a higher likelihood of purchasing your online widget (disclaimer: This isn’t a recommendation to target curlers to sell widgets).

We also cannot forget the consumer factor. As data collection and utilization has advanced over the past decade, consumers have been left in the dark. They don’t always know that investing in data does not simply equate to brands purchasing it outright. Online services are rarely ever free, and your data is paying the way for access – however, a recent study found that 53% of consumers are concerned about how tech and social companies are using their online and location data for commercial purposes.

The time is now for consumers to learn and understand what data they’re giving up, and what they’re getting in return. For myself, disclosing location information to use a GPS service is a trade-off I’ll make 100% of the time. This understanding provides perspective on what kinds of messages are served to you and why, which ultimately empowers you to be a more critical consumer in the digital space.

Data as a raw material can be extremely valuable, but it’s important to understand that it’s only as valuable as what brands and agencies extract from it. In today’s market, big data is still seen as something desirable, but complicated and convoluted. At the end of the day, data can unlock efficiency, opportunity and utility, but only if you’re investing in it in the right way. It starts with giving clients complete transparency over data sets, which leads to more conscientiousness around how data is being used.

Jessica Tran is a director at Magnet Consulting.