Today’s Technology Sausage Factory Digital marketing, Communications | Greta Paa-Kerner | 19 April 2016

The Online Advertising Ecosystem 

Lips, ears, snout and all, today’s sausage factory of data is complicated and convoluted. Data is repackaged and re-sold as inventory. It flows through the online advertising ecosystem without clear accountability as to what is being tracked and sold. And what is the quality of data in that sausage? Is it consumable?

The sophistication with which digital marketers can accurately target a specific customer segment continues to develop and my recent consumer experience highlighted this point precisely. Just the other day, products in my shopping cart from Made.com ended up in a targeted display ad on Twitter. I had been browsing on my laptop, had put two items in my shopping cart on Made.com and then left the website. No sooner had this happened, the same items appeared in promotional ads inside my Twitter feed on my mobile device. How was my Twitter handle connected to my shopping cart on an e-commerce site? How was it connected across different devices? My data is being minced, spiced and re-formed, like a sausage.

Is this a useful user experience or is it unnerving? The answer to that question will depend on your age and whether you perceive the Twitter ad as something useful. In a study conducted by Ofcom, 42% agreed with the following statement: “I am happy to provide personal information online to companies as long as I get what I want.” This number jumps to 55% for those aged 16-24.

In fact, that same Ofcom report indicated that nearly one in four of respondents aged 16-24 don’t really think about the personal information they are providing online. (See chart below.)

chart = greata 2

Harvesting personal data online doesn’t appear to be a concern for a quarter of the younger population. More surprisingly, concerning personal data, there is little apprehension across 17% of the population. Are Internet users aware of how their data is being collected, packaged, shared and traded?

An online user’s movements are being tracked by third-party scripts and then sold on to data providers who process it and then create thousands of segments like “relationship status”, “age group”, “ethnicity” and “annual income”.  These data segments can then be sold on again on a cost-per-mille (CPM) basis to demand-side platforms (DSPs), supply-side platforms (SSPs), ad networks and other data management platforms (DMPs). As it’s being repackaged and resold and repackaged and resold again, the data begins to be dissociated from its original form, a bit like mince.

Could it also be divorced from its original purpose of giving consumers a more personalised and useful marketing experience? Could fraudsters use this data? What about “Big Brother”? What about insurance companies? What if this reconstituted data is used for more than just serving accurate ads?

It’s too early to know for sure as the online advertising ecosystem is still maturing and taking shape. It’s a fast-moving and radically transforming environment that may eventually need a regulatory framework that will be either industry-levied or government imposed to safeguard consumer data and online user habits.