Research from IAB Data Center of Excellence and Data & Marketing Association Shows Largest Share of Budgets for Third-Party Activation Solutions Going to Accuracy and Brand Safety
The IAB Data Center of Excellence and the Data & Marketing Association (DMA) have released “The State of Data 2017,” a study showing that U.S. companies will have spent $10.05 billion on third-party audience data in 2017 for advertising and marketing efforts. However, slightly more – $10.13 billion – will have been spent on third-party solutions to support its activation.
The research, compiled by Winterberry Group, and based on an analysis of financial information provided by a range of the nation’s leading commercial data providers, estimates that of the money spent on third-party solutions, $4.3 billion is expected to be spent in 2017 on supporting data integration, processing, and hygiene. These types of services help maximize the accuracy and actionability of audience data while providing contextual brand safety. Spending on hosting and management solutions is anticipated to hit $4.2 billion by end of the year. Analytics, modeling, and segmentation solutions are expected to take in $1.63 billion.
The study revealed that of the $10.05 billion expected in third-party audience data more was spent on Omnichannel than others, reflecting the value marketers are placing in reaching consumers on multiple devices:
- Omnichannel ($3.53 billion)
- Transactional ($2.99 billion)
- Digital ($2.07 billion)
- Specialty ($0.88 billion)
- Identity ($0.56 billion)
“Audience data is only powerful when you can put it to work, and this research shows that U.S. companies are turning to outside help to tap into that power. These findings must be seen as a call-to-action for more guidance and education across the ecosystem. The IAB Data Center of Excellence is ready to answer the call with an unwavering commitment to working with publishers, brands, and other stakeholders to ensure that they have the skill sets and insights necessary to take full advantage of the audience data they collect and acquire,” said Orchid Richardson, Vice President and Managing Director, IAB Data Center of Excellence.
Neil O’Keefe, Senior Vice President of Content and Marketing, Data & Marketing Association, added, “As customers come to expect a hyper-personalized experience, marketers, and advertisers are focused on fully optimizing their third-party audience data, and they’re willing to invest in that optimization. Companies are spending significant sums on services and technology to assist with key data functions—more money than on the data itself. A key challenge to reign in these costs will be stronger budget oversight and increased focus on developing data talent that can rise to the occasion.”
“Data has become the fundamental currency in marketing, and it’s no surprise to see it command a significant share of marketer and publisher investment,” said Patrick Dolan, Executive Vice President and COO, IAB. “In a world where old business models are being disrupted by new, audience-centered direct-to-consumer brands, it will be interesting to see how these expenditures grow over time.”
“This research report provides credible, practitioner-informed insights into how U.S. companies are investing in audience data and its associated support functions. It will help practitioners benchmark their own spending against industry norms and establish a firmer basis for future investments,” said Jonathan Margulies, Managing Director, Winterberry Group.
“The modern data and marketing industry is thriving because of customer relationships built on truth, results, and trust,” said Tom Benton, CEO, Data & Marketing Association. “This research demonstrates that modern marketers are strategically investing in solutions to ensure their third-party data is not only ethical and secure, but effective and accurate.”
“The State of Data 2017” was released at the IAB Data Symposium in New York City.