The Mandate for a Better Marketplace
By now, the notion that customer data is a strategic asset of today’s real-time and digitally-minded enterprise is a generally accepted credo. You’ll find no contrarian dispute on this topic from me — none whatsoever. That said, I continue to be surprised by how eagerly we ignore the real-world complexities involved in acquiring data inputs in the first place. For example, the fallacy that third-party data has minimal value, is readily accessible and cheap is still prevalent, and yet many vendors and customers have significant, and complex, internal business processes dedicated to extracting value from third-party data. The reality is that the value of data is partially related to the total cost of acquiring and applying the data, which is ultimately a function of how seamlessly and efficiently data owners and data seekers can execute a mutually valuable transaction. In other words, the mechanics of how a marketer acquires data, and at what price, can be as important as the data itself. While first-party data (data that the marketer already owns) is by definition seamless to acquire, the material opportunity presented by second- and third-party data (data the marketer needs to license from others), is still hampered by legacy pricing models and often overlooked operational inefficiencies.
So what are some of the hurdles on the path toward more profitable data owner and data seeker transactions? First, pricing models for data are evolving more slowly than the number of digital marketing use cases for data. Data owners and data seekers have increasingly sophisticated notions of how they want to use data, but lack the frameworks needed to price these data-driven marketing programs. Lack of flexibility in pricing data often leads to lack of adoption altogether or very short-term data relationships plagued by unsustainable commercial terms. The classic example here is our de-facto cost-per-ad-impression (CPM) rate cards for thid-party audiences. CPM works wonders for media applications of data, but is a poor fit for many other emerging use cases for data-driven marketing. Additionally, while the second-party data use case is now a reality for enterprises that are plugged into marketing platforms that enable these relationships, few platforms provide the analytics and discovery tools required to scale a second-party data strategy. To get liquidity in a second-party data marketplace, marketing technologies need to help data owners and seekers identify who their prospective counterparts are and the specific value of the data being exchanged between the parties — often when there may not be dollars exchanged. Lastly, few things will clog the pipes to fluid licensing of second- and third-party audiences more so than opaque billings and untimely payments between data owners and data seekers. In our eagerness to tout the breadth and depth of the data assets that we provide our customers, marketing technology providers overstate how easy it is to execute clearing house services. Past due payments and delayed billing reports lead to mistrust and hidden costs of executing second and third-party data programs — for all parties.
I remain unabashedly bullish on the future of second- and third-party audiences as sources of great value for today’s digital enterprise, and the ways marketing technology will evolve to eliminate the above bottlenecks to unlocking this value. Soon, Adobe Audience Manager, Adobe’s market-leading data management platform, is releasing Audience Marketplace, the next generation marketplace for acquiring second- and third-party audiences. Audience Marketplace will minimize the effort for both data owners and data seekers to execute data deals and to ultimately recognize the financial impact on their respective bottom lines. With Adobe’s robust ecosystem of third-party data partners and enterprise digital marketers, Audience Marketplace will maximize both supply and demand of high-value second- and third-party audiences. Audience Marketplace will feature additional pricing models for purchasing audiences, which complement industry-standard CPM models, and leverage Adobe’s enterprise-class quote-to-cash operations for billing reconciliation.