Data Leakage

How many days until your data is someone else's?


By Webtrekk CEO Christian Sauer

 

Data, data, data. Everywhere you hear the same need from marketers. But for non-digital natives and mega-insiders alike, digital marketing has become dizzingly complex.

Everybody understands that their organisations need to be data-driven, but in-house expertise is both hard to find and expensive to retain. Is there an easy solution?

For those trying to navigate the chaos of online marketing, third-party advertising tools sound like a trip to paradise.

These tools’ value proposition is simple and beautiful: “Put our technology on your app and website, and we will send you people from our data pool who (a) will like your products, and (b) have a high chance of converting. And we will only charge you if you are successful!”

Sounds great, doesn’t it? Maybe a bit too great.

We have heard about data leakage from a number of our customers. So I want to take a moment to explain exactly what data leakage is, and then go over four tips for how to make the most of your data without letting your competitors do the same.

How third-party adtech works

Third-party advertising tools, sometimes referred to simply as adtech, help companies leverage their intent data, which forms the foundation of conversion.

There are basically three types of digital data: search, interest and intent.

Search data is dominated by Google, the global king of search. Good luck going head-to-head with them on that one.

Interest data refers to the types of content that people like, share and consume. Handicrafts, skiing, clothes and so on. Facebook and publishers own the market for interest data.

Intent data, meanwhile, is collected by ecommerce and price comparison companies studying what happens on their sites. If a user has the intention to buy something (simple product view) or the strong intention to buy something (abandoned basket), it will be evident in their onsite behaviour. True intent data is not available to Google or Facebook or publishers. Sure, they might have an idea, but genuine, user-centric intent data is collected on your website and your apps.

By lurking in the background of websites and apps, adtech can track behaviour and collect data on what products your users are interested in, and in what combinations, and in what quantities. Adtech will know, and it will make sure that this user sees relevant ads no matter where they might go next.

Adtech tools on Website A collect data about users on Website A. This data is then made available to ad networks used by websites throughout the web. When those networks identify Website A users at a different website, relevant ads are displayed.


This sort of personalised, user-centric approach, coupled with adtech tools’ easy-to-understand value proposition, has made them incredibly popular. Here are the lists of third-party providers for three big companies that, I promise, you have definitely heard of.

These lists of adtech tools comes from Ghostery, a browser extension that scans websites for adtech, analytics and other third-party tools.


On many of these sites you will see a lot of tools for all kinds of purposes. Analytics, Heatmapping, Affiliate, Remarketing, etc. (As you can see, Webtrekk is also present in a few of those lists.)

In other words, there is a lot going on behind the scenes of modern websites and apps. And lots of these tools are specifically designed to capture what people intend to buy.

And once you know that, everything else falls into place. If I look at a shoe online or put a shoe in my basket, but then get distracted and don't buy it, my intention is still there. That won't change – not until I make a purchase.

Users carry their intentions with them no matter where they go, and these intentions are the currency of digital marketing and e-commerce.

If it sounds too good to be true...

There is, however, a catch. After consulting with a number of clients, we realised that adtech optimised their advertising, sure, but also their competitors’ advertising.

In other words, users' intent data was leaking to other companies.

So we did a little experiment. You can read a comprehensive overview of the experiment in this report, but I’ll give you a brief summary: We created a totally clean browsing environment, with no history or cookies or extensions, and then we shopped for very, very specific items. One such item, for example, was Adidas basketball gear.

After spending days building Adidas.de shopping carts with nothing but Adidas basketball items, adtech started placing Adidas basketball ads all over the Internet:

But after two weeks, news seemed to leaked that we wanted shoes. And even though we never browsed a single non-Adidas sneaker, we saw ads for plenty of non-Adidas options.

Advertising was no longer based on existing baskets or favourite brands. It was based on the type of items that our shopper intended to buy. It was no longer about Adidas basketball; it was about basketball, period.

And this is exactly what data leakage looks like: The intentions of our shopper were used to fuel advertisements for companies whose websites our shopper had never seen.

In the process, data that was accumulated by the original company (Adidas) was used to optimise advertisements for different, competing companies.


Adidas was even sharing the same pages as its competition.


Sure, Adidas' competitors might appear sometimes simply by accident. But would they be appearing on the same page? Repeatedly? Obviously those Adidas ads are there for a reason: We shopped at Adidas.

And while coincidences can happen, those other shoe ads are there for a reason, too. We intended to buy shoes, and adtech knew it.

The same thing happened in other sectors. For example, we used a specific telecom provider – one of our clients, in fact – to search for a phone and a data plan.

Within seven days, which is not even as long as the typical sales cycle for this purchase, just about every telecom provider we have heard of was offering us products.

It is like you are walking into Walmart, and 17 agents of Aldi, Lidl, Tesco, Rewe, Carrefour, etc., are following you and capturing every product you are interested in at Walmart.

Imagine asking Walmart if you could follow around their customers and jot down every single thing they looked at and intended to buy. And then imagine asking Walmart if, in two weeks, it would be okay to contact those same shoppers with alternative offers.

What would Walmart say? Probably a four-letter word, followed by "no!"

Okay, so now what?

Make no mistake: Data leakage is a two-way street. If Company B’s adtech tools can identify potential customers even if they were never at Company B’s website, then other company’s adtech tools can do the same.

In that sense, companies that fall victim to data leakage are also in a position to benefit from data leakage.

It is also important to note that adtech providers that help Company B gain from the efforts of Company A are not necessarily trying to hide it. For example:

[The adtech provider] is the sole owner of the Service Data and the Campaign Data and may use either for any purpose allowed by Applicable Law


And:

The Client authorizes [the adtech provider]: (i) to collect, use, analyze and process the Client Data, to combine the Client Data with [adtech provider] Data… to improve [adtech provider] Technology […] and other [adtech provider] products, programs and/or services...


Even if the benefits cut both ways, and even if adtech providers are sometimes relatively transparent, data leakage causes companies to lose control of the one thing that is most valuable to them. Data.

And that is why it is important to think about the value of the ad networks in your website’s portfolio. Imagine the red rectangle is your target market. And the existing networks you are working with are green ovals, each covering parts of your target audience. When you install Adtech Tool #17 to your portfolio, you will only gain a fraction of a new audience – the red area – but you will give away your data for a 17th time.


Imagine you had the money and would want to buy a painting of Da Vinci at an auction. How many agents (not knowing of each other) would you send to that auction? More than one? In Adtech the auction system also applies, so you should be aware of the players bidding for your ads. Unfortunately this is often not the case. Many bidders bid against each others to show the customer your ad. This doesn´t make sense!

Amazon, Facebook and Google are very much aware of this. They do not share any data with anybody else:


So our recommendations, in a nutshell:

1. Understand data leakage and understand exactly where your data is going.

When third-party advertising tools collect data about your users from your website, it stops being your data.

It’s not like the data is not being published online, and it's not like your competitors can suddenly advertise on your website.

But this is a fundamental aspect of adtech. This is how adtech works. Good or bad, right or wrong, that is what you have to understand.

Data about your customer interactions and the intentions of your users can be used to help you, yes, but other companies as well.

2. Ask if you really need that 17th ad network on your website.

Adtech tools do incredible things, but are so many really necessary? Each and every adtech tool you put on your website exposes you to data leakage. Two or three good ones might be enough.

After all, you do so much to bring people to your site. You invest in SEO and SEA and other channels. You run social media campaigns, and you might even do retargeting. You want your website to be as visible as possible.

With data leakage, that visibility is actually used against you. Think of a couple examples we saw earlier – Adidas and GetSupplied, the company selling Nike shoes.

Adidas.de’s Alexa.com ranking is 15,739 worldwide and a healthy 421 in Germany. Not bad.

GetSupplied.com, on the other hand, is ranked 23,122,000 worldwide.

“Parasite” might be too strong of a word. But it is safe to say that GetSupplied is in a better position to benefit from Adidas’ huge volume of intent data than Adidas is to benefit from GetSupplied.

3. Start being data-driven yourself, without needing a thousand third-party tools, and use tools that help you with this.

Ignoring analytics data and ignoring personalised, user-centric marketing is not a solution to the data leakage problem.

Instead, the solution is being data-driven in a way that enables you to retain your data. This takes manpower, no doubt, but investing in in-house capacity is the best way – and maybe the only way – to avoid data leakage.

You can further protect your data by using integrated solutions. That means not relying on a programmatic advertising solution that is totally independent from your analytics solution. Instead, use an analytics solution that integrates with programmatic. Reduce the number of tools.

The more separate tools you rely on, the more holes there are for data to drip from. Using tools that help you keep your data in one spot is the best way to avoid that.

4. If you do use tools that share your users’ intent data, include data leakage concerns in the contract.

Not all participants in the adtech ecosystem are created equal. As we saw with Adidas and GetSupplied – one giant, one small player – some companies are in a much better position to benefit from data leakage than others.

The companies that pour resources into search and social contribute much more to the adtech data ecosystem than companies that don’t have the resources to do the same.
 
So even if some third-party tools are absolutely necessary, include data leakage in your contract. If you leak data, make sure you either receive a revenue share or some other benefit that helps your business at least as much as you are helping other businesses.

If your company utilises adtech, that is fine. Do not get me wrong. Lots of adtech providers have awesome tools for driving conversion and profit. Adtech has real value.

We just want to make you aware of data leakage. Data pools are being filled with your data. And when that happens, your data can become someone else’s data. Remember, when a service is free, you are the product.

Want to know more about data leakage?

 
 
 
 

Want to know how data leakage affects
your business?

For more, check out our extensive report on data leakage:

How third-party advertising tools use your data to make your competition smarter.

Press inquiries should be directed to Marketing Manager Julia Gölles.