After ACCC review, data, segmentation and targeting could become more expensive for everyone
If data is the new oil, the bear market may be set to turn. Local and global moves to regulate platforms and the adtech supply chain could have a major impact on the cost of data – with knock on implications for segmentation, targeting and the rest of the data-driven ad universe. Marketers take note: should the price of data rise, digital's deflationary effects could be reversed.
What you need to know:
- An ACCC proposal to introduce data portability measures is likely to make the price of data more transparent and potentially more expensive.
- That would have knock-on effects for marketers, publishers and agencies.
- It could also ultimately lead to a consumer data marketplace, where people understand the value of what they currently give away.
Forcing companies to licence data under new proposed data portability rules will introduce greater transparency surrounding the price of data, according to Joshua Lowcock, New York-based chief digital and innovation officer at UM.
The measure is among the six proposals made by the ACCC to curb monopoly advantages within the digital ad ecosystem - and it could have major ramifications for marketers, publishers, and the advertising supply chain.
“If you have data portability then you also introduce some pricing transparency about the value of media and data,” Lowcock told Mi3’s latest podcast.
“If data is portable then the person that's being either forced or compelled to license data on [to others], will have to set a price for that data in the market which it is valued on.”
Lowcock, when pushed, suspected the price of data would go up. But he said a market-making mechanism, such as "an independent pricing review tribunal to actually set the wholesale price of data" could be a good start.
MFA Deputy Chair Megan Brownlow agreed that could drive up the cost of data.
“If we do end up taking data seriously to the point where we implement an independent pricing and review tribunal, which I think is a brilliant idea, it underscores how valuable data is and how critical it has been to the growth of the biggest, strongest, most powerful companies in the world,” she said.
“If we do have such a system, then [data] really most likely will go up in price but in smaller increments, and that's because the regulation and administration of data has some costs built in. So the cost of data will go up reflecting those newer regulatory costs.”
Brownlow said putting a price on data would also give consumers a greater appreciation of the value of what they currently consent to give away for nothing. That could ultimately lead to services that pay consumers directly for using their data, rather than platforms, or a "consumer market for people's personal data" as has been mooted in the UK.
Kristiaan Kroon, Omnicom Media Group’s chief investment officer, thinks prices could go either way in a market-based mechanism.
"It's hard to tell where that price point would go,” Kroon said. "Advertisers have built their own data sets, which is an interesting counterpoint to relying on media or ecommerce or whatever you want to call those businesses that provide them with data.
"So we need to see more from the ACCC on which way they are going to go with this."
Should data costs rise, the cost of digital ads, given additional data layers have traditionally commanded a premium would likely rise in tandem. That outcome could reverse digital's deflationary pressure on advertising prices.
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