Peter Randazzo is Chief Technology Officer of iCrossing, a global, digital marketing agency
The above headline contains an acronym long enough to strain its credibility as a time saver. TANSTAAFL stands for "There ain't no such thing as a free lunch", and while it may not roll off the tongue, its meaning is indisputable. It is one of those rare axioms that holds universally true across cultural and generational boundaries, and should be heeded by everyone. Consider the following scenario:
You manage an online property of significant scale that is well connected to an active and engaged customer base. Even better, some of your customers are enthused enough to act as advocates, effectively growing the popularity of your brand on their own. Truly, this is an achievement worthy of being proud of, and while you are proud, you have yet to get satisfactory analytics in place to measure, predict and even manipulate their enthusiasm. Traditional web analytics neither approach the problem nor arm you with actionable insight. One day, into your office walks a salesperson with a great new product. Let's call it Leak Central. Just put their tracking tag on your web pages, he says, and Leak Central will tell you why your best customers visit and even offer suggestions to turn them into even more rabid fans. How much would you pay for such knowledge? Well, do not worry about that because the best part is, it’s free.
Is the product above really free? The telegraphed answer is no, of course. Would your answer change if the circumstances were different? Rather than a successful property, imagine you run a struggling site with a minimal budget relegating you to the use of tools with minimal or no upfront cost. Under these circumstances, is Leak Central free? The answer is still no. Move the circumstantial levers any way you want, even imagine yourself to switch from a publisher to an advertiser or vise-versa, and the answer will not change. TANSTAAFL holds true. While our scenario may not involve money changing hands from one party to another, the message is: should you implement Leak Central, each visitor to your site will initiate a siphon extracting value from your business and give it to third parties. The cost that you bear is the erosion of differentiation. For the use of this tool, you are teaching countless others intimate details about the habits and preferences of your customers that only you should know. Data leakage is real because nothing is free, even when it is.
Data leakage, in this online marketing context, is defined as the transfer of online audience information from an online property to third parties without compensation or mutual agreement. The term, therefore, is unfortunately a misnomer or, at the very least, a misuse of the word "leakage". When air is leaked from a car tire, the car the tire is attached to is not going very far. When milk is leaked from a carton, then only the cat can drink it off the floor. If data were leaked in this same way, then it would not be available for use after its loss, yet it is. After data leakage has occurred, the information is still in reports, personalization systems still work and targeting campaigns still perform. The loss is simply not felt immediately. The term data leakage is a misnomer because data is not leaked, its value is.
Why and how does this happen?
The above scenarios are very real. The internet is an unimaginably vast universe where customers interact with brands and titles on a dizzying array of devices and channels in varying degrees of anonymity. Engaging and measuring customers in this universe is very hard and requires scale and technological prowess. One need only glance at the latest LumaScape to understand there are plenty of service providers in the mix, many with ample profit streams anchored by marketers’ need for technology, but fueled by the collection and repackaging of others’ audience data. The use of third parties for online marketing activities is, therefore, the very epitome of a necessary evil for both advertisers and publishers.
As the use of third parties for both data and technology is necessary, some might jump to the resigned conclusion that data leakage is an unavoidable result of conducting business online, and furthermore, that there is nothing to be done about it. These others are half right. Some data leakage is unavoidable, but the damage can be minimized, shaped, mitigated and controlled. Turning off the spigot requires the treatment of audience as a kind of currency requiring protection and vigilance. Read all applicable contracts, taking special care to understand and police exactly who has the rights to use and keep your data. Vested interests matter, so be extra wary of any partner who makes a living selling data or customer intelligence in addition to the service they are performing for you. Consider the implementation of a pixel management system to watch, manage, minimize and mask tracking calls to third parties. Monitor them for changes and turn off any that are not necessary. If your audience is highly valuable, look into a data management platform (DMP) to leverage its power or combine it safely with other proprietary data sources. Many DMPs come with pixel management capabilities as well.
Overall, the message is simple. Get smart about your audience while keeping others from getting much smarter along with you. TANSTAAFL is real, if only because of the veracity of another maxim from our youths, "When someone offers you something that seems too good to be true, that’s because it is".