Data and Advertising: A Canadian Perspective

In a joint survey between Mediative and MediaNet, we surveyed 113 professionals across Canada to determine the level of understanding, comfort, and satisfaction with data and data products in Canada. 67% were direct brand advertisers, and 33% were agency media buyers.

Data in Canada vs. the US

Before we look at how data is used in Canada, let’s compare Canada to our neighbour, the US. One of the problems in Canada is that, unlike the US, much of the Canadian publishing landscape comprises a relatively small number of players – most of whom have been reluctant to make their inventories available for auction, and have locked their data out of the third-party aggregator space. Those who have chosen to make inventory available have opted to funnel access through privately operated exchanges.

Index Exchange research shows that transactions on the private market places represent 35% of the advertising volumes in Canada as opposed to 8% in the US, however, the real dollar value of these transactions is the same.

There is (or at least has been) a general sentiment that Canadian options are lacking in comparison to the US. That may have been true (particularly concerning third-party data), but the landscape is evolving and there are more second-party data options available (i.e. publisher data) today than in the past. This was in part spurred on by the growing adoption of programmatic among Canadian publishers and advertiser demand.

74% of digital display ad dollars in Canada will be transacted programmatically by 2018, according to eMarketer. Driving programmatic ad spending’s growth are:

  • Efficiencies gained by automated ad buys
  • Advertisers in Canada becoming more comfortable using automation and technology for ad buying.
  • Fast-rising adoption of programmatic methods to place mobile and digital video ads, influenced by programmatic direct ad products from Facebook and Google.

The Survey Results

Do you currently use audience data for targeting online display advertising campaigns?

Between ½ and 2/3 of respondents were using audience data for targeting online display advertising campaigns. We asked those who responded No, why they were not using data in campaigns currently. The top reasons given were:

  • Lack of knowledge (36% for direct advertisers, and 56% for agency)
  • Budget (32% for direct advertisers, and 44% for agency)
  • Scale was also a concern for 8% of direct advertisers, and 22% of agencies
  • Surprisingly, 16% of direct advertisers who are not using data stated it was because they do not think it’s necessary in their campaigns.

Data is critical for any marketer who wants to effectively reach an audience. So why are there still numerous marketers who are not including it in their marketing plans?

Challenges arise when it comes to implementing a data driven strategy, mostly due to lack of education, lack of technology and infrastructure, or lack of planning. Data as a strategy is still viewed by some as a short term, campaign optimization metric, yet it has potential medium and long-term results on marketing budgets, like increased revenue, effective targeting, and improved competitive positioning.

The majority of digital marketers and customers also have concerns about data privacy, data sharing and security control, and data quality. Poor data can hinder results, thus eroding trust in using the tactic as an efficiency tool.

According to July 2016 research by Loudhouse Research, bad quality data can have a significant impact on a company’s bottom line. 56% of the UK and US executives surveyed said bad data had contributed to lost sales opportunities for their firms, while 51% also said bad data had led to wasted time and increasing company inefficiency (Source: eMarketer).

While there are many signals in the market about what data cannot do, it’s what data can do that makes it such a key component in an advertising strategy.

Why do you use audience data in online advertising campaigns? What are your expectations?

Higher conversion efficiency was the #1 reason for audience data being used in campaigns, cited by 66% of direct advertisers, and 87% of agencies, followed by a more qualified exposure (at 58% and 74%), and finally higher engagement rates for 58% of direct advertisers and 61% of agencies. Quality audiences, reached by more personalized campaigns are most likely to convert, and that’s what advertisers and agencies are using data for.

The shotgun approach of advertising to the masses and hoping for conversions just doesn’t cut it anymore. The demand for performance-based campaigns is increasing, with the focus of many display-advertising programs shifting from impressions to conversions. Advertisers want to know exactly who they are targeting, and where they will be in order to then provide them with a rich customer experience. When used in the right context and mix, data is a powerful strategy.

Considering your expectations, how successful would you say your data-driven campaigns have been?

For both direct advertisers and agency, data-driven campaigns have largely been successful with 85% of direct advertisers, and 96% of agencies reporting “Somewhat successful” or “Extremely successful” campaigns. Of these, 68% of direct advertisers and 89% of agencies were using first-party data.

In comparison with the US, a study commissioned by Econsultancy in association with Signal found that just over one-third of senior-level marketers in North America thought that data driven campaigns had a strong positive impact.

It’s important to note that not all campaigns will see an increase in performance off the bat. It’s not enough to simply start a campaign and hope that the conversions will come rolling in – campaign optimization is still absolutely necessary to get the maximum ROI. For example, Mediative worked with a well-known automotive company that not only wanted customers to see an ad or click on it, they wanted them to take action e.g. request a quote or book a test drive. Using YellowPages.caTM proprietary first-party data, the users who were more likely to take action after having seen the ad were identified. Frequent monitoring and campaign optimization played a huge role in the delivery of efficient results including increasing the life of cookies, as consumers who would purchase a car were likely to be researching their purchase 60-90 days prior to their actual date of purchase. The first-party data was constantly the best performing strategy, generating 180% more conversions compared to other data sources, even with a click-through rate 60% lower.

What types of audience data have you used to target online advertising campaigns? (Select all that apply)

First-party data is the most used data type among our Canadian respondents, and it’s easy to see why when we look at the results they are experiencing and the benefits that come with first-party data. However, one of the main roadblocks for marketers to increase their data driven strategy is the lack of Canadian first- and second-party data.

With only 10% of agencies and 9% of direct advertisers stating that they were extremely satisfied with Canada’s data products, it shows the industry has a ways to go in terms of what it can offer Canadian advertisers.

How likely are you to continue using audience data in online advertising campaigns?

With successful campaigns under their belts, 95% of direct advertisers, and 96% of agencies are either extremely likely or somewhat likely to continue using audience data in their advertising campaigns.

Despite security concerns and a reluctance to share the results of a their data driven strategy, marketers are placing their bets on data. One of the most recent efforts for those who want to improve targeting is a data co-operative. Data co-ops are an online pool of shopper-shared data as well as shared first-party data from publishers and brands. This addresses marketers’ concerns about their data security because it is shared with a handful of trusted partners. What is not yet defined by the industry is the monetizing part of this data sharing pool. Unlike media buys, first-party data is not a source of high volume revenue for brands and publishers alike. It is seen as very valuable, but nobody could really put a price tag against it. As long as there is no standardized monetization model, data is cheap and effective.

Conclusion

Canadian advertisers and agencies see the value that data has for targeting display advertising campaigns, and over half of those surveyed are using data in campaigns, with budget, and lack of knowledge being the primary reason for those organizations not using data.

However, with the majority of direct advertisers (74.4%) being only somewhat familiar with the distinction between the different types of data, it’s clear that more education is needed. If you’re not familiar with the different types of data, check out this infographic that distinguishes between each of the three types of data, specifically what each type is, the benefits, limitations, and examples.

However, as more case studies emerge of businesses and agencies realizing the benefits of data, especially for higher conversion efficiency, we will undoubtedly see an increase in the adoption of data into strategies, and knowledge around data types will increase as a result.

The majority of Canadian organizations surveyed that are using data, and in particular, first-party data, in their online advertising are seeing some level of success, which is positive news for the data industry. Combined with optimization strategies and a medium to long-term outlook, these organizations that are pro-data, and keen to get a foot up on their competitors, will likely see only bigger successes from future campaigns, if they are open to some trial and error in identifying optimal data sources.

The outlook for data usage among Canadian advertisers and agencies is good. While the majority of our respondents were only somewhat satisfied with the availability of data products currently in Canada, one quarter were somewhat likely to continue using data in online advertising campaigns, and two thirds were very likely. Good news for the consumer who, as a result, is going to see much more relevant, personalized ad messaging, which is what is needed on the part of the advertiser in order to combat the rise of ad blocking.