Despite Regulation Fears, Marketers Are Still Investing Heavily in Data

'Data isn’t just big—data is growing'

Companies will spend an estimated $3.6 billion on acquiring digital data assets like IP addresses. - Credit by Getty Images
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Marketers might hand-wring about the prospect of privacy regulations and the continued impact of the European Union’s General Data Protection Regulation (GDPR), but they’re still spending big on data. By the end of the year, companies are expected to have spent more than $19 billion on buying, managing, processing and analyzing third-party audience data, a 17.5 percent year-over-year increase, according to a report released Wednesday.

The report, from the Interactive Advertising Bureau’s Data Center of Excellence, found that marketers are expected to end 2018 having invested more in digital audience data assets than any other kind of data, including terrestrial or personally identifiable audience data, like names and addresses, which has long been the leading form of data investment among marketers.

Companies will spend an estimated $3.6 billion on acquiring digital data assets like IP addresses, device IDs and unique device identifiers, as well as on processing and interpreting said data— a 36.9 percent increase year-over-year. Investment in all forms of audience data, from transactional data to specialty and experimental data formats, was up year-over-year, the research found.

“Data isn’t just big—data is growing,” said Jonathan Margulies, managing director of research and consulting firm Winterberry Group, which produced the report on behalf of IAB Data. “It’s growing in strategic import, and it is growing in terms of both real dollars and in proportion of overall marketing and advertising budgets.”

The report, which was the result of interviews with senior-level U.S. marketers and data practitioners, the aggregation of publicly available financial information about data investments and other quantitative analysis models, is aimed at helping marketers understand the data economy and provide benchmarks as reference points for brands and companies collecting and using data for marketing.

The report found that marketers are expected to spend 50 percent more on identity audience data, which includes information that can help marketers keep track of a single individual across various devices. Overall, marketer spend on identity data in 2018 is expected to be about $846 million.

The research also found that marketers are expected to have spent nearly $5 billion on data management, processing and integration, a 25 percent increase year-over-year. That spend is driven by both an increase in the amount of data marketers are looking to leverage, Margulies said, and by the expectation of consumer data regulatory measures, like the California Consumer Privacy Act, which will implement GDPR-like rules when it goes into effect in 2020, or federal data privacy regulatory measures, which are already being considered and drafted by legislators.

Brands and companies, Margulies said, are looking for ways to build out data management tools that are able to adjust to regulations that are expected to come down the pike.

“Not only are companies thinking about being compliant, but being compliant-plus,” Margulies said.

Orchid Richardson, the vice president and managing director of the IAB Data Center of Excellence, said she was “surprised” that regulatory measures haven’t dampened the investment into data, and that she would be watching to see how further regulations may impact investments in the future.

“The important thing is that we have made the investment in collecting this data,” Richardson said. “The key is: how do we make the investment into analyzing it and making it work for us?”

Correction: Due to a typo, an earlier version of this article included an incorrect figure for marketer spend on identity audience data in 2018. That figure has been updated.

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@kelseymsutton Kelsey Sutton is the streaming editor at Adweek, where she covers the business of streaming television.
Publish date: December 5, 2018 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT