Advertising 5 Min Read

Using Data For Good in Advertising

Written by Tim Edmundson

Last week, AT&T was allowed by a federal judge to acquire Time Warner for $85 Billion in hopes of combatting the immense power of Connected TV providers. Netflix, posited as the “the most powerful company in Media,” by SteelHouse CEO Mark Douglas and other industry experts, is valued at $160 Billion not just for its content, but for the way its data can be used to provide an appropriately personal experience to its hoards of subscribers.

As giants like Facebook struggle to inform their users of the ways in which data is shared, leveraging consumer experience with the vast amount of personal data available to companies remains crucial to brand reputation and success. Failure to inform and protect user data has resulted in large scale losses, lawsuits, and policy implementation; including the introduction of GDPR last month. People have come to expect and demand relevant advertising, but aren’t willing to sacrifice their feeling of privacy for it. We’re going to take a look at exactly how to personalize advertising the right way, but first let’s talk about where the line is and what we think crossing it looks like.


Crossing the Line

Digital advertising has come a long way from the notorious, untargeted pop-up ads. From wide net casting to individual targeting, using data for good is an ongoing challenge for advertisers. What makes data so powerful, and how are some media industry leaders able to create personal experiences without invading consumer’s sense of security?

Let’s say you want to buy a car. Dealerships in your geographic area might target digital advertisements to entice you to buy. This may be a useful and beneficial tactic for the dealership, as it provides a personalized relationship between producer and consumer. Take it a step further; the dealership uses data to create an ad including an image of a car in their dealership photoshopped into your actual driveway. Too personal? What about an image of their car, with pictures of your kids in it? Way too far, right? Although all of this data is likely available to advertisers, achieving permission from the consumer in order to establish a personalized relationship is imperative. Here’s what we’ve learned about data driven advertising successes of companies like Netflix, and the value of effective ad personalization among privacy scares.


What Makes Netflix Unique

Beyond content, quality, and popularity, Netflix has the ability to target 100 million subscribers in a really unique way. Recently Mark Douglas, CEO at SteelHouse, explained on Fox Business that, “Netflix is the only company that can take any piece of content and find exactly who wants to watch it. Everyone else broadcasts and creates content hoping someone will watch it. Netflix knows who will watch it. No other company in media has the capability, where you log in and are presented with what you want to watch. This process is done on an individual basis.”


Obtaining Permission

Netflix not only broadcasts to its enormous user base, but caters its broadcast individually by utilizing user data. Netflix’s success depends upon the relationship they have with their users. When users grant you permission, then you have the right to communicate with them. The first and most important step in personalized advertising is obtaining permission; presenting users with a clear privacy policy communicating the terms related to the exchange of personal information for user benefit. Until they give you that permission, using their data to create a tailored experience registers as invasive.


Managing Expectations

For effective ad personalization, it comes down to expectation. In order to effectively deliver a personalized experience, the user must feel it is a fair trade between giving up personal info and the benefit received. For example, Netflix users know that they’re watching preferences and history are recorded. Additionally, and to their benefit, this data is then used to tailor the “suggested for you” recommendation engine. The relationship is built, and used for both the company and user’s benefit.


Communicating Transparency

Netflix is transparent about the data they use, and the benefits they provide on an individual user basis. They communicate their transparency in the form of “recently watched” history, and user friendly recommendation engine. Despite the fact that Netflix is likely able to collect far more data than is presented to the user, data such as age, gender etc. is used to further individualize the user experience. Language like the “because you watched” section is just one example in which Netflix uses transparency to show users just how their data is used. Netflix acts like a trusted friend; keeping relevant private information to themselves, while showing users how they deliver a highly personalized experience.


How to Apply This to Your Own TV Advertising

Data personalization allows for a better user experience. Advertisers can learn from cases like Netflix, and leverage their data to ensure they’re reaching the right customers at the right time. Using personalization is key for advertisers, and like Netflix, they can now do this on TV with the advent of Connected TV advertising. TV advertising is now able to use data to personalize and target specific audiences. What sets Connected TV apart is the data; the individualization of the customer experience and ads as a result. Successful advertising of the future must provide users with the same comfort and utility of Netflix’s “suggested for you.”