How can you minimize risks when using third-party data sources for marketing?

When assessing data needs, it's a good idea to evaluate lost opportunities through the lens of missing or erroneous data elements. Specifically, if we had known X then we would have increased the likelihood of winning by Y. Use historical wins to support this analysis.

1. Carefully assess the reputation, data quality, and compliance practices of potential data providers. Scrutinize their data collection methods, data security measures, and privacy policies. 2. Clearly define the purpose and scope of data usage in written agreements. Specify the types of data allowed for marketing, data retention periods, and data disposal procedures. 3. Establish data governance policies and procedures to ensure data quality, consistency, and compliance. Implement data access controls, data encryption practices, and regular data audits. 4. Adhere to all applicable data privacy regulations, such as GDPR and CCPA. Obtain explicit consent from individuals before using their personal data for marketing purposes.

As with any initiative, start with the end in mind. Decide and define what your objectives, goals, and desired outcomes are. This is not different with data and probably even more important. Define the desired outcomes, the business and technical requirements, and the "why". Too often I have seen organizations make the mistake of buying data to just buy data. Or buy the wrong data from a provider that does not align with the type of data that you need (i.e. wrong industry, segment, market, region, personas, etc.).

Responsible use of third-party data mitigates risks while optimizing marketing. Thoroughly assess your data needs and vet suppliers before purchasing third-party data. Review provider security protocols, opt-out policies, and data collection methods. Perform audits to ensure quality, accuracy, and relevance over time. Restrict access to protect consumer privacy through role-based permissions. De-identify data by removing PII when possible. Seek legal counsel to ensure compliance with regulations like GDPR or CCPA. Monitor changing laws. A few well-known providers are: 1. Acxiom 2. Experian 3. Nielsen 4. Oracle/Datalogix 5. LiveRamp

These samples are often the deal breakers of these data providers, especially after you have niched down on your requirements. If you go for generic data, that's what you will receive, which they send to everyone. So, be careful about it while considering this aspect.

With the explosion of data providers available on the market, it is easy to get overwhelmed or lured by buying the biggest, loudest, or most expensive. Once you have defined your outcomes and requirements, make sure you do your due diligence to select the data provider that will be most comprehensive to meet your needs. In past roles, I have opted for more niche data providers when the type of data I needed warranted it. For example, the data you need in an e-commerce business will be different from healthcare, insurance or technology. Look for data providers that align with your needs. And always, always, always, ask for an analysis (i.e. give them a small sample of data and analyze match rates) or ask for a free trial.

It always surprises me how many organization do not have a data governance structure. In a smaller, startup environment, you do not need as complex of a structure as a larger enterprise company, but you still need data governance. My recommendation is to start small with a data strategy, a data steward, some policies for how data gets updated/ edited/ added/ managed, roles and responsibilities of key individuals, and a definition of where the data will be stored and maintained. From there, you can build out your data dictionary, compliance efforts, audit process, etc., etc. The key is to just get started!

Tip: rarely should you overwrite your own data with 3rd party data. Best practice is to write 3rd party data to its own fields that sit next to your 1st party data.

When implementing third party data providers, have a process in place for how/ when/ where/ etc., the data will be maintained and refreshed. Don't ever implement the data without having this in place as data gets stale as soon as it is published and you don't want to be in a situation where the data is so out-dated that it is completely unusable and has lost all credibility.

Logging and securely storing opt out info is incredibly important. If you're using several tools to do outbound with the data, make sure the unsubscribes, do not calls etc are updated in one central location. This should probably be your CRM. Too often someone opts out in one channel but still gets contacted via another. Your tools need to integrate well with your CRM to keep opt out permissions up to date!

I've used 3P data to enhance personalization efforts and appended 1P data stitched to 3P data to enrich the depth and accuracy of customer profiles. Be mindful of outdated data, choose a reliable 3P data source, and prioritize the ethical use of data. Regularly validate and monitor performance to ensure accuracy. Also, diversify 3P sources to safeguard against uncertainties, promote adaptability, and contribute to the sustainability of marketing campaigns. In the era of cookie deprecation, the challenges for online advertisers are real. 3P data steps in as a valuable resource. It not only bridges the gap left by cookie restrictions but also provides a more comprehensive view of user interactions across devices.

Mitigating risks with third-party data in marketing: Vendor Due Diligence: Vet vendors for reliability. Data Quality Assurance: Verify accuracy before integration. Legal Compliance: Adhere to privacy laws. Secure Transfer: Use channels to prevent breaches. Clear Contracts: Establish usage and security terms. Regular Audits: Periodic checks for ongoing quality. Data Encryption: Employ transit and storage security. Anonymization: Consider for sensitive information. Retention Policies: Adhere to strict data management. Internal Training: Educate teams on privacy and ethics. #DataSecurity #MarketingStrategies