US marketers on track to spend in excess of $19B on data The State of Data 2018 report is out. It was produced by the Interactive Advertising Bureau’s Data Center of Excellence in collaboration with the Winterberry Group, a research and consulting firm. Three key findings from their research: 1. Companies are investing more money than ever before in US data for marketing
purposes. 2. In fact, for the first time ever, they are expected to spend more on digital data than on any other kind of data. 3. Compliance with new privacy laws is also fueling greater spending on data management.
Knowledge has always been power. In this day and age, information is a greater form of power than ever before. This has prompted both Europe and California to pass privacy laws. These are General Data Protection Regulation (GDPR) in the European Union and the California Consumer Privacy Act (CCPA), which is coming soon. Perhaps somewhat counter-intuitively, these new laws are increasing the amount spent to manage, process and integrate data. But it's really just a logical outcome of the intent to control the flow of data so consumers can preserve their privacy. The cheapest way
to handle data is to be indiscriminate with it. Being discriminating takes additional resources. The report was based in part on interviews with both marketing executives and data professionals in the US. One conclusion: US Companies will spend about $19.2 billion this year on audience data. This includes expenditures on processing, managing and analyzing consumer data.
The numbers in question represent a 17.5 percent year-on-year growth trajectory overall. It also represents a 36.9 percent increase over the previous year for third-party data solutions. The total expenditure for third-party solutions of this type is expected to be $3.67 billion. In contrast, spending on personal identifiable information and geophysical data is up only slightly and shows a 2.5 percent year-on-year increase. It is expected to total $3.62 billion. At the high end, spending on identity data and speciality/engagement data are both expect to slightly exceed 50 percent. Spending on identity data is expected to hit 50.3 percent growth and $850 million while spending on speciality/engagement data is expected to hit 50.9 percent growth and $1.02 billion. Additional areas of data expense include analytics, segmentation and modeling. Even
small shops can get in on the action using relatively cheap and accessible big data tools. The fact that data acquisition and modeling is becoming relatively accessible may be one of the trends fueling this expense. Another would be the fact that it gets results.
The amount of money being spent on third-party solutions is good news for anyone wanting to open up shop as a consultant or write an app for this niche, such as a customer relations management platform. There is definitely a market for such endeavors. Not only is there a market, the market is booming. This type of advertising is taking on a central role in marketing. The ability to interact with the data in something close to real time with fine control is unprecedented and game-changing. Those taking advantage of the opportunity are positioned to leap ahead of the competition. Those refusing to get with the program may well be left behind in this ever faster changing marketing landscape.