Oct
11
2013

The link between data relevance and accuracy, and consumer trust: a Q&A with Rick Erwin

Rick Erwin, president of Targeting at Experian Marketing Services, is a direct marketing industry veteran and a board member of the Direct Marketing Association (DMA). At the DMA Conference next week in Chicago, Rick will be co-presenting with Yahoo! and sharing some concrete methods for providing more personal experiences for consumers. We sat down with Rick to discuss his upcoming speaking engagement and to explore two issues impacting the data-driven marketing industry today: data accuracy and consumer privacy.

Suzanne: We hear and read a lot about personalization in marketing, but when it comes to advertising, is this just rhetoric? How do you move from relevant to personal?

Rick: Personalization can often seem like industry jargon because it’s a long term strategy that is tough to execute. But consumers are demanding it from both branded content and advertising. For example, I may receive an email offer or see a display ad for a TV that I already purchased because I researched TVs online at one point. That offer or ad for a product I already own is not relevant or personal. In fact, in many circumstances it can be intrusive. Data such as explicit and implicit interests, social signals and Facebook Likes, and click data can create a detailed profile of each user — what they like, when they like it, when they purchase it and how they like to hear about it. Experian Marketing Services works with companies like Yahoo! to help brands find the customers that matter, deliver relevant content to those customers and then measure the outcome against sales so that campaigns can become more personal over time to those customers. Personalization isn’t achievable in a campaign-based approach; it’s critical that advertisers and marketers have accurate, quality data that allows brands to reach real customers, evaluate their lifetime value and how their loyalty and spend improves over time based on drivers like relevance — and then personal advertising.

Suzanne: How do you define quality data, and why is it important?

Rick: Quality data is accurate data at scale. As an industry, we are at the earliest stages of using data for more personal online advertising and experiences. In a broad sense, we are taking the principles of direct marketing and applying those online — right time, right place, right product, right channel. But, frequently, those principles are being applied in a broadcast world that skews toward scale over accuracy. Today, what we consider “good data” is likely to evolve. Quality data is verified, privacy-protected and traceable. The CMO knows where it comes, knows that it’s accurate and can therefore plan and execute more efficient campaigns. If you’re an advertiser, it’s critical that you work with 3rd parties that are transparent about where their data comes from.

Suzanne: Data-driven marketing isn’t a new practice; Experian, for example, has been in the business of consumer data and targeted marketing for more than 50 years. Are consumers more concerned today with their privacy and if so, why?

Rick: The concern that consumers have about their privacy is real and it’s understandable but it isn’t new. In fact, you could say that our concern and need for privacy is a part of human nature and our culture. If we share information with a company — our email address, our dog’s name, if we use a credit card — we want to see a benefit. Whether that’s a discount, access to information or a more convenient experience, we expect something valuable in return for sharing our information. I don’t think it’s fair to say that consumers are more concerned with their privacy today than ever before, but I do think that consumers have less of an understanding for what information is used and how it is shared and that breeds distrust.

Suzanne: There has been an increase in scrutiny from government organizations like the FTC and the Senate Commerce Committee on the topics of consumer privacy and “data brokers.” Is this an outcome of consumer demand?

Rick: It’s an outcome of not fully understanding the industry and a call for transparency. We hope that this increase in scrutiny will lead to greater transparency and education around how marketing data is organized, used and protected. There are strict and clear guidelines already in place that dictate how companies can use consumer data for marketing purposes. These existing laws were established to protect consumer privacy around sensitive information like social security numbers, health care and financial status and prevent unsafe or harmful business practices. The information-economy is a key driver of growth and innovation in the U.S. because, as an industry, we have the flexibility to evolve as technology and consumer expectations evolve. Information sharing is good for consumers, transparency is good for businesses and data security and accuracy is essential for both.

Suzanne: Some consumers argue that data mining and brokering practices aren’t ethical and shouldn’t be legal. Can you explain why they are ethical and valuable for consumers?

Rick: As I mentioned before, the connection to value for engendering consumer trust is critical. There is a value exchange that is cyclical: the more accurate the data, the more relevant the offer, the more explicit the reward, the stronger the trust, the more consumers want to share. Information-sharing is valuable for consumers because it gives them more control over their environment in which they can receive offers and experiences that are more personal and rewarding. This can take many forms: a grocery loyalty program that sends you coupons for items that you frequently purchase; an airline miles program that sends you to Paris for a second honeymoon free of charge; a social media network that allows you to stay in contact with your friends all over the world; a mobile app that notifies you when a storm is coming. Unfortunately, the example of the irrelevant TV ad is more common than not and as an industry we need to do a better of job of ensuring that our data is accurate and our strategies have consumer value in mind.


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