Study: Companies spend more than $20B on third-party audience data, solutions
- A study from the Interactive Advertising Bureau (IAB) and the Data & Marketing Association (DMA) compiled by Winterberry Group found that U.S. companies will have spent $10.05 billion on third-party audience data in 2017 and another $10.13 billion on third-party solutions to support that data, per a press release made available to Markeing Dive.
- The State of Data 2017 report also found that $4.3 billion is expected to be spent this year on supporting data integration, processing and hygiene while spending on hosting and management will reach $4.2 billion and spending on analytics, modeling and segmentation solutions will hit $1.63 billion.
- The spending on third-party data is spread among data types with omnichannel leading the way at $3.53 billion followed by transactional ($2.99 billion), digital ($2.07 billion), specialty ($0.88 billion) and identity ($0.56 billion).
The fact that marketers are spending more on omnichannel and transactional audience data compared to other types, suggests they are focused on retargeting and providing relevant product recommendations. While the study doesn't forecast where spending might go or indicate the growth rate in spending by type of data, marketers have expressed growing interest in people-based and one-to-one marketing at scale, suggesting the investment in identity data could grow. While third-party identity data is sold in aggregate, marketers may still be wary because of its potential for misuse.
The combination of spending on a range of third-party data types coupled with even more spending on solutions meant to help corral that data illustrates that audience data is only powerful when it can be utilized, said Orchid Richardson, vice president and managing director at the IAB Data Center of Excellence, in a statement, adding the research shows that U.S. companies are turning to third-party help to tap into the power of audience data.
The reason third-party audience data has become so important for marketers is customers have come to expect a hyper-personalized experience, said Neil O’Keefe, senior vice president of content and marketing and Data & Marketing Association, in a statement. A challenge for companies is to control the costs of that data and the solutions purchased to manage the data with stronger budget oversight and an increased focus on developing data talent in those companies stated O’Keefe.