by Adam Skikne
Advertising people like to talk a lot about data. There is a commonly held belief by many people in the industry that data is the future of advertising. And while I do believe that data has the potential to revolutionise advertising, I also can’t shake the feeling that a lot of people talking about data don’t actually know a lot about it.
So without any further ado, here is why advertising people should calm down a bit when talking about the future of advertising and data:
1. Businesses Already Have Plenty of Data
Most marketers paint data as this magical silver bullet that will solve everything that is currently wrong with advertising (which is a lot). But if data is that amazing, why aren’t more advertising people making use of the data they already have? Every company already has plenty of data that could be used to grow their business – so why isn’t it being used?
It’s already possible to work out things like the lifetime value of a customer or a brand’s share of a customer’s wallet. Every company is able to track their competitors’ online activity. There is a wealth of public social data that brands can mine and merge with existing CRM programmes. You can already do amazing things with data. Instead of talking about the future of data and advertising we should rather be seeing what we can do with data we already have.
2. More Data is Not Always Better
The amount of data and information available to us is increasing all the time but that doesn’t mean that all of it is actually useful. This idea is something that Nate Silver unpacks in his book The Signal and the Noise.
In the book, Silver looks at the factors that prevent us from making accurate predictions. Why didn’t the majority of economists see the global financial crisis coming? Why can’t scientists predict the weather or the effects of global warming? Why do security agencies still miss terrorist threats? In all of these cases, a number of extremely smart people had access to a lot of data and still got things very wrong.
More data is not necessarily a good thing. Avinash Kaushik echoed this sentiment when he described the paradox of data: “A lack of data means you cannot make complete decisions, but even with a lot of data, you still get an infinitesimally small number of insights.” When people talk about data, what they really want is insights. Ideally, we should be focusing less on data and more on insights.
3. Advertising People Are Not Data People (or at least not yet)
Everyone in the industry is talking a lot about data but how many of them are employing people who actually know anything about data? What percentage of agencies are made up of data people? 5%? 1%? 0,5%? If data is so important, why don’t we have more data people in the industry?
I may be unlucky but I’ve sat through some very questionable “data-driven” presentations. For example, one post-campaign report focused on the click through rate of mobile banner ads. The result was less than 2%, which was still double the average click through rate for mobile banner ads. Sounds great right? The problem was that the content on the other side of the ad was not mobile friendly and would crash the smartest of smartphones. Even with a 100% click through rate, the only thing those ads would have done was waste a client’s money and frustrate the end user.
I’ve got one friend who is a process engineer and another friend with a doctorate who is an actual data scientist. Compared to the average Art Director, I might consider myself to be a “data person”. But in the real world, I’m not a data person. I’m still someone who works in advertising that understands a very limited set of metrics. Let’s not lose our minds here.
Having said that, agencies need to hire more data people. Real data people. They need to up-skill their staff or encourage them to watch some statistics videos on Khan Academy… or something.
Of course data is going to play an important role in the future of advertising. But we need to stop talking about data and start using it. We need to understand the limits of data because it’s not magic sauce. And if we want to be taken seriously, we need to seriously up our game or start hiring some real data people.