I often hear on Facebook about “they are selling data” in discussions involving direct plan portals. Most of the time discussion is initiated by the distributor hitmen, as they are the ones to lose most by this direct plan thing. Being a student of Marketing, this turns very amusing for me. Normally such discussion never goes deeper enough for me to identify genuine concerns too. This post is my attempt to show the “selling data” thing through 2 lenses called STP and REC.

The STP can be expanded as Segmentation, Targetting and Positioning. STP is one of the views that a marketer uses to approach a market. REC is the area of focus for the marketer, its expanded as Reach, Engagement, Conversion. A marketer always focuses on only 1 aspect of REC while approaching the market. The data is the fuel in the STP thing, as decisions in that regard require data. 

REC & The Aim

The first step of the marketing process is in what it aims to do. Reach is a measure of the number of people who saw the campaign. Engagement is a measure of the number of people who interacted with the ad. Conversion is a measure of the number of people who fulfilled the goal of a campaign.

For example: If I wanted to create awareness about a product, then reach will be the total number of people who exposed to the ads for the product. The engagement will always be a subset of reach. In this example, it will be people who showed interest in ads and saw it.  The conversion is always a subset of Engagement numbers. In this example, it will be the number of people who became aware of the product. Since this metric cannot be measured, the conversion will be considered equal to engagement numbers.

In another example, If I wanted to create awareness about marketing via this article. The reach will be the number of people who saw this article. Engagement can be people who opened this article in their browser. The likes, clicks, and comments are not good measures of engagement here as they do not serve the purpose of the campaign. The conversion will be the number of people who read the article completely. ( Reading will be considered as a proxy for understanding the content but in reality, it’s not!!)

For every marketing campaign, there will always be a goal, a vision or an aim. The REC framework describes the ground realities of that goal. It’s this REC framework on which the STP hinges on.

STP & Landing

The Segmentation, Targetting and Positioning is how a marketing campaign is conducted. Segmentation splits the audience based on criteria we want to achieve in the marketing campaign. Targetting is about picking the marketing segment on which one wants to focus based on the quality of REC we want. Positioning is about the method in which the goal of the campaign can be achieved.

For example: If I want to bring awareness about Ather s450 electric scooter, I would segment the market based on mediums where I would get the target audience. In this case, it would be in forums like team-bhp etc. The positioning will be on ways to capture the attention of members of that forum. In that case, it will be reviews, first drives and the opinion of fellow members, that gets me to achieve the goal.

To achieve the above said, objective of awareness, I needed the data for making the decision in each step of the process.  For segmenting the user data of mediums was needed. And to pick target audience the quality of medium was to be known. Then to position the campaign, the member preferences were required. If one keenly observes, all these data required in STP were anonymized and averaged or summated.

“They are Selling Data about me” rant

In the example of bringing awareness about Ather s450, We knew that data marketers have will be anonymized (If it isn’t and marketer tried to exploit it, then it would backfire on him in a really bad way).  The portals whose primary revenue source is advertisements, normally create tools to access this anonymized dataset to target the advertisements. And billing is usually done via engagement for ads which are textual in nature. If they are display ads then it gets billed for reach. The engagement based charging mode is called CPC – Cost Per Click. The reach based billing is called CPM – Cost Per 1000 Impressions (M is roman literal for 1000). And in the strict sense, this data never gets sold, but instead, it is used for creating finer targetting categories to increase the engagement.  Since they also do ad management, these portals are considered as ad networks.

At the other end of the marketing spectrum, is the class dominated by idiots. It is them who do the most idiotic thing of selling data. The gullible users of this Data i.e. the Telecallers, who too belong to idiot class, are sentenced to lowest levels of conversion rates. The people who fall for such advertisements are also ultra gullible idiots. Since this end is dominated by idiots one need not worry about this end of the spectrum. But recently we heard a lot about Facebook selling data to a third party. That does raise questions, is facebook part of idiot end of the spectrum here?? 

The integrity of guys shouting “Social media are selling data about you”

This perception of “social media sell data about you” was, in essence, a war between old-school media and social media.  In this regard, we heard a lot in print media, TV media and News sites about the Facebook selling data to the third party. But the war of words drowned the reality. During 2011 and 2013 a developer created a personality test app. Since this app was hosted on Facebook, users had to give some permissions to run the app. This app became popular and many used it. The developer took the data on his machine and later sold it too. When Facebook came to know about the developer having the data,  it asked the developer to delete the data.  The developer at that time hadn’t sold it yet, and he replied to Facebook that he had deleted the data, but he hadn’t. When Facebook came to know about it banished him and took down all his content, but the damage was done already.

Since there is a war going on between old-school media and social media, the old-school guys brought up privacy aspects. Since old-school media can only give the average estimate of reach and its also lot more unreliable than digital mediums, they can claim their mediums give privacy. In the case of digital mediums, the tracking prowess is a lot stronger, hence privacy is less. Due to the higher quality of data in digital mediums, marketers are more bent towards it. This creates a war situation between the two.

Many of the media houses deciding to skip EU due to GDPR should add more credibility to the issue, as the bigger ad networks were compliant long ago.

Conclusion
  • The old-schools rant on privacy is not fuelled by care for privacy, but to protect his base, which is getting eroded by digital media.
  • Everyone with data creates the tool to exploit this data by becoming an ad exchange.
  • Value of an ad exchange is dependant upon targetting capability it offers and quality of conversions that occur.
  • Data stores like Aadhar or SSN System are never made into ad networks, instead, its used by governments for benefit distributions and to remove middlemen who are the primary source of corruption in such system.
  • Every marketer aims for higher conversion rates, hence he will never commit a sin of buying data from a data seller.
  • Every seller of data operates outside the boundary of law, once the law catches him, he is finished.