Opinion

The 80:20 View: The clean space in being truly transparent about data usage

In his regular column for Mumbrella, Thinkerbell's general manager Ben Shepherd examines the missed opportunities in the data privacy debate.

Advertising-funded media companies operate within a relatively unique business. They have ultimately two very different types of customers and prosperity ultimately relies on an ability to balance both perfectly.

The first customer is the user. This could be the viewer of the TV network, the user of the news property, or the listener to the radio or audio platform. They don’t pay a financial cost to access the media outlet, but they are vitally important to the media business.

The second customer is the advertiser. They do pay the media company in a financial sense. They pay the media company to access their users. In doing so, they subsidise the users experience and if the media company is lucky they provide enough revenue to generate a profit.

Most industries don’t work this way. They don’t provide a product to 99% of their customers for free with, say, 1% of them paying for everyone else.

For decades the relationship media companies facilitated between these two customers was widely understood. Viewers and users may not have understood the economics of advertising, but they understood advertising was being placed in front of them.

If you speak to a media company now as an advertising customer, they will spend the majority of their pitch informing you of their sophistication around data. They will trumpet their ability to target. Their advanced, addressable knowledge of their users. Their thousands of segments of behaviours, consumption and future intentions.

They couldn’t be prouder of what they’re doing in data and will take any forum they can to tell their advertising customers about it. And so they should: Australian media organisations have evolved significantly in this area and have every right to want to inform their customers.

The challenge is, the same level of education and information is not being provided to their other customers. The ones that use their websites, browse their apps, watch their programming. The ones who provide all that information and data that is being used to extract more than ever out of their advertising customers.

This seems weird to me. And I think it presents an opportunity.

Advertising today is fuelled by data. We know this because it’s a constant discussion topic for the industry. And media is fuelled by data too. Data doesn’t just inform advertising products, it informs media products and ultimately makes them more responsive to the user.

Data is the fuel that really fuels the successful media company today. Data improves products. Products create more value for users. More value means more users. More users means more data.

If this flywheel can begin to spin it can become highly valuable. But if it’s not moving, the opposite can occur and you can go backwards quickly.

 

Source: author supplied [click to enlarge] 

Data and the ability to create product momentum is deciding the winners and losers. Think Amazon, Facebook, Google, Netflix, TikTok and YouTube. All of these businesses thrived during COVID and are seeing exceptional returns for shareholders

However, when it comes to their users they’re never as keen to talk about what they collect, how they collect it, where and when. And as a result these media companies that rely more on data right now than they do on any other element, are losing complete control of the discussion around privacy.

Working in media and advertising it’s easy to assume the average media consumer is as informed about the minutiae of advertising targeting as we are. The reality though is they’re not. At all. Users do not know how their data is being used by the media they access. It’s an area no media company or advertiser really wants to talk about with them.

There have been calls going back years on the need for businesses to be more upfront around this area. And as media companies continue to not want to be upfront with their users about why they collect data and what is done with it, companies like Apple are dropping millions of dollars into using privacy as a feature on their devices. They’re running prime time TV, online video, and they’re even writing papers on the subject.

In a Day in the Life of Your Data, Apple use the example of a Dad visiting a park with his daughter to demonstrate all the ways data can be tracked via the mobile device. It’s an interesting narrative and one that would be sure to shock the average phone user.

The view of Apple appears to be to ask permission, don’t beg forgiveness when it comes to collecting user data. Which is a fair position.

However, in the current situation due to the lack of proactivity from media and advertising companies most users wouldn’t know enough about what is being collected, when, for what purpose, and how, to make any sort of educated decision.

This is because no one wants to talk about it.

But what would happen if a business did? If a business decided it would walk away from the legalese of the standard privacy policy and explain in plain English, and place a material amount of resource behind it to make sure all their users were super clear about what was happening.

Channel 4 in the UK did this as far back as 2012, using Alan Carr to outline why it had started collecting email addresses. And its current approach to privacy is equally clear.

There is a window of opportunity for a progressive media company, likely a local one, to do something similar in Australia and take a more proactive participatory role in informing users about data collection. Informing users shouldn’t automatically mean they opt-out. Giving them clear understanding of what’s in it for them, as well as a clear and easy opt-out if they wanted it, would really distinguish a company brave enough to do this with all the other companies happy to collect data but not happy to inform their users about the practice.

Data is so valuable media companies can’t afford for companies like Apple to set the agenda on privacy, or wait for the government or Office of the Australian Information Commissioner to legislate and make the issue a political one.

So what would need to be covered? In a nutshell, the basics.

  • What data do you collect?
  • How is it stored? Is it identifiable?
  • How long do you store it for?
  • What services, other than the media owners site or portfolio, can this data be used on?
  • Who else is collecting data across this media platform? Why? And what do they use it for?
  • Does the media company sell my data, or data collected on my usage, to any third parties?
  • Is the media company creating a profile on me? Is this limited to just me, or does it include my family and children either express or inferred?
  • How is the data used? Both for product and for advertising?
  • What security measures does media company undertake to protect my data?

Answering these in plain speak would be very helpful to the average user. And it would move data collection from something done under the cover of darkness, to something done in plain sight that is helping fund the world’s media.

It’s time for our media companies to own this. To protect their valuable data asset and help inform their users about how they’re being tracked. Advertising is data driven now and there is no going back – this is the norm and it’s probably time the source of the data is properly informed.

Ben Shepherd is the general manager of Thinkerbell. The 80/20 View is a regular column on Mumbrella.

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