In 2018 Digital Element, a global location and data services leader, published the Digital Data Exhaust Report 2018 in partnership with the Location Based Marketing Association (LBMA). The whitepaper, consisting of research and surveys conducted over the summer of 2018, aims to explain digital data exhaust – data that businesses either consciously or unconsciously throw out because it seemingly provides little or no value to their core business.
Figaro Digital spoke to Rob Friedman, Founder and EVP of Digital Element, about the results of the report, what on earth an IP address is anyway, and what this all means for location data and the digital marketing industry.
FD: Thirty-two percent of respondents to the survey said that they weren’t concerned about digital data exhaust. Why do you think this is?
RF: It’s a great question and basically, people don’t know what they don’t know. They think that they have everything they need because that’s all they’re used to getting – exact lat/longs from GPS opt-ins for example. They think that’s all they need and don’t realise all the other information they could have access to but is being thrown away
One example of digital data exhaust is businesses not using IP address information coming from a WiFi or mobile user who doesn’t have location services turned on. All of a sudden they’re losing a whole world of stuff and are ignorant to the opportunities they are missing out on. So many marketers are sitting there thinking that they’re not doing anything wasteful by being selective with their data use, but they really are.
FD: Digital Element’s report about digital data exhaust suggests that this loss of potential valuable data significantly affects revenues. Can you explain why this is in your own words?
RF: If you have competitors that are using data in a more efficient or a broader way, you may be at a direct disadvantage to them – potentially losing customers and not bringing in new revenue because you’re not able to target them. Or, you’re simply not engaging with consumers in a way that is optimal while your competitors are. Ultimately, you’ll lose new opportunities which in turn will negatively affect revenue.
Another example is, if you’re an app, you are only engaging with people who are opting in and giving you direct access to their location via GPS. Because of this opt-in/GPS caveat, you’re missing out on a bunch of consumers who aren’t opting in. They might not be on a mobile device, but they may also be giving you valuable information you could use to target them – data that can be used to do lookalike modelling with users that you currently don’t realise you could be doing anything with such as showing more relevant content based on location and other attributes.
FD: Much of the potential within IP data is still untapped, what do you think will be possible within the industry once this resource is fully realised and utilised properly?
“Companies that can mine the data and conduct this analysis, closing the gaps, will become the leaders in location intelligence and be the biggest beneficiaries in today’s digital marketplace.” Asif R. Khan, Founder & President, LBMA
RF: Primarily it will mean better interactions with consumers, expanding a business’ base, and giving more context to relationships. What can be done with our technology is something that I’m still educating people about, even in our own company.
For example, we have a first-of-its kind point-of-interest database, so knowing when somebody is at a specific location is hugely important when trying to figure out what we know about them other than that location. For example, if they’re at a Hilton Hotel you can use this data to answer some vital questions: Do you want to target everybody at Hilton Hotels? What else do you actually know about this consumer? Are they travelling for business? These are questions that location data can help answer, opening up numerous avenues for marketing – they may want to do some sightseeing, they may be more apt to use dry cleaners, they may have a different disposable income than somebody at a less expensive chain, or they may be more interested in restaurants.
Basically, you could know a lot about your user just based on that initial point of interest and do modelling to attract more of those users. Or, you can potentially engage with them in a way that makes more sense by knowing what they’re doing by applying some data science to it. We’re just scratching the surface here in what can be accomplished with this data exhaust. It’s also not only about attracting more eyeballs, there’s a heavy focus on being able to give those consumers what they want, when they want it, and as they want it. That’s really the key, as well as this all taking place in a privacy-sensitive manner, which is the beauty.
And this is incredibly important, as a business you don’t want to be in a situation where you’re violating somebody’s privacy as it reflects poorly on you and it spooks away potential customers. That’s before you even consider the legal and practical aspects of it – even in countries that don’t have regulations similar to GDPR. You always want to be privacy sensitive, while also giving your consumers access to as much relevant information as you can.
FD: How can the marketing industry work to change the general conception that all data collected, apart from the data willingly given in a form, is an invasion of consumer privacy?
RF: In relation to IP data specifically, a lot of it is misunderstanding what an IP address actually represents. An IP address belongs to a network, and we never know exactly who that online user is without getting other information directly from him or her. In order to obtain that data they would have to opt-in, or in situations where it is legally required, you could mandate that the ISP or organisation turn over all their records which would require a legal subpoena.
In order to get very specific, you’ve got to get the opt-in. But the general information afforded through IP data allows you to give much better communication with that individual, even without them opting-in. But you have to understand, technologically what can be done and I definitely think there could be better education for marketers and consumers alike – IP data is much less intrusive than a phone number or a street address for example.
IP addresses can be ‘owned’ by hundreds of people, or can be proxied where thousands of people are sharing it and you don’t know anything about an individual user, however you can still do modelling or derive useful information from that situation. There absolutely has to be better education on this, which should be undertaken by marketers in combination with those that are knowledgeable in other industries. Unbelievably, sometimes even those passing security laws get confused about what can and can’t be done with an IP address. So, we’ve been on the education side of it, but it is difficult as once you start talking technology, a lot of people shut down and assume that it’s like a digital phone number – which it really isn’t.
Ideally, there needs to be a concerted effort to help the wider population understand how the internet works in general. For example, I don’t think a lot of people know that every single transaction on the internet has to have an IP address in order to route traffic efficiently. Without that you couldn’t even get content that you want, let alone marketing content.
We are able to gather our IP targeting data without ever interacting with a user specifically, by looking at the guts of the internet. So that shows you how far away from the end user the technology tends to be, yet there is not a common understanding that there is still valuable underlying data that can be extracted from an IP address.
FD: How important is it that marketers produce one-to-one experiences that replicate or resemble real life?
RF:It is hugely important and for some apps or websites it is absolutely paramount to their business, because their consumers are used to dealing with things in a certain way and you want to replicate that experience as closely as possible. Really, getting information to consumers when and where they want it based on the context of that interaction is invaluable. I think in some cases there is probably less emphasis on this because consumers are used to dealing with things in less than a real-life manner. Sometimes if you’re treating it like a real-life conversation – a chat for example – it could spook a consumer or possibly be less effective.
Our data brings balance because it’s general enough, yet adds this whole geo-textual nature. Obviously when you are in a specific location, that affects everything we do in life – the kind of currency we use, what type of clothes we wear, etc. You can still paint a picture of the consumer, as the geo-textual nature of the data lends itself to that conversation. As you think about it, more and more people are gravitating to doing things online or through a mobile app because they actively don’t want a real-life interaction. However, there’s a balance that needs to be found as those people still need to be targeted with relevant information that will hopefully produce a conversion.
FD: How do you think marketers can help tackle, or convince their company to tackle, the data exhaust problem on a practical level? Can the data exhaust be stemmed from the marketing team up?
RF:Initially marketers have to recognise the issue. I think it will be a combination of marketers educating the wider company, but the burden of proof also lies with the engineering side where a lot of education needs to take place. The best marketing teams work well with engineering to harvest currently unused data and implement data science to explore things such as lookalike modelling. It is realising that you are missing potential customers because you don’t look at certain data sets – not looking at mobile carrier data for example – and then working together to rectify that.
We also get a lot of proxy traffic which is another bridge to cross. There are a fair few people deliberately hiding their identities by using a proxy because they want to surf the internet without leaving a digital trail – this is sometimes in the pursuit of committing fraud. So you can look at that additional information with your engineering team to figure out why these people you are doing business with are using a proxy. A lot of people using proxies simply think that they will be over targeted, so as a marketer you need to work to make that transaction better so they no longer feel the need to use a proxy.
FD: One of the main examples that pops into mind is the different content available in different countries on Netflix. There was a time – not so long ago – where it was pretty easy to get on a proxy and watch shows from another country. This is an issue where they’ve obviously looked into that data, seen the level of proxy use, and worked out how to bypass that and stop people from accessing content that they aren’t paying for.
RF:Exactly, and Netflix is one of our clients. Most of the large streaming networks use our technology for that exact issue, and rightly so, as they have to obey certain legal restrictions and monetise content.
These questions have all been really good and it got us thinking beyond the article, some of them were things that we hadn’t thought about. Even as a leader in this area, we learn more, the more people ask questions. We came up with a few uses for our technology and all of a sudden people are asking us if it can be used for all sorts of different things, so I don’t think we have all the answers of how this technology can be used. I think marketing, tied to data science, tied to engineering teams, and all working together is the best way to ensure you’re getting the most of the data you have at hand and the relationships you have with your consumers. Ultimately, it is about helping them get a better experience and helping businesses get more out of the data at their disposal.
You can download a PDF of the report here.