Consulting firm Winterberry Group took a close look at data on-boarding, a blossoming sector of the data industry poised for continued growth as marketers strive to attain the still-elusive goal of reaching specific consumers across all channels. According to the consulting company's just-released "The State of Consumer Data Onboarding" report, the data on-boarding market will grow from $250 million this year to $1 billion in 2020.
Put simply, data on-boarding is a process that transforms data gathered offline, such as CRM data, into information that can be used to target consumers through digital media. Winterberry defines it as the process of linking offline data with online attributes.
"While the consumer data onboarding market is still undergoing rapid growth, we expect the market to mature in the next couple of years with targeting use cases remaining core, analytics and attribution rising in importance and increasing application of onboarding to emerging trends within the marketing and advertising landscape, like addressable TV," states the report.
It mentions an array of companies immersed in the on-boarding space, including Oracle and LiveRamp, data providers and services firms such as Epsilon, Experian and Neustar, and ad tech firms including MediaMath and Lotame. However, rather than discussing how individual firms operate in the on-boarding process, Winterberry provides a detailed overview of how on-boarding is used, and suggests questions that marketers should consider when evaluating services.
The firm believes, for example, that marketers must understand how providers calculate match rates when linking customer data to online data. Marketers should know how a match is defined, how match rates are calculated, how often matched files should be updated, and how often match partners update their own data, suggests the report.
As is the case with most emerging tech sectors, standardization has yet to come to on-boarding, and that seems to be especially true for match-rate-related definitions. The Direct Marketing Association recently worked with firms involved in on-boarding including LiveRamp, consumer identification and matching firm Conversant, and programmatic ad firm MediaMath to develop industry guidelines to ensure agencies and their data services providers work from the same standard definitions for terms such as "match rate" and "accuracy."
Marketers have been fooled when unaware of how companies determine a match rate. For instance, in some cases, a match rate could include instances when a matching company determines that there is no match, rather than reflecting only the portion of records that were successfully matched.
"As the market matures, demand for both accuracy and reach in a privacy compliant manner will drive differentiation between providers and provider types. For providers without either accuracy or reach, their competitive position will be diminished and their pricing leverage will suffer," stated Winterberry.
The report also stresses attention to consumer privacy when marketers consider data on-boarding. In fact, it advises that marketers holding sensitive customer data should avoid on-boarding:
"Additionally, marketers that primarily collect sensitive consumer information (e.g., medical history) should likely not look to onboard. While onboarding creates significant opportunity to expand accuracy and reach, onboarders and marketers must ensure that they are not targeting consumers based on sensitive or presumed information."
The consultancy also predicts that the use of persistent identifiers for matching will grow, diminishing the use of cookie-based matching. Media-buying giant GroupM this week, for example, announced tech enhancements and executive moves intended to fulfill its goal of attaching all the data sources it manages to a persistent consumed identifier. Acxiom-owned on-boarding firm LiveRamp recently acquired two publisher data providers, Arbor and Circulate, in part to improve its ability to determine and match mobile identities to other consumer data.
Firms providing marketing data services are in a race to dominate cross-channel identity connections, a priority for advertisers as they try to deliver targeted messages to the specific people across devices.