Third-party data can be months outdated and irrelevant to the actual target audience, but brands in the Asia-Pacific still turn to these datasets religiously, when they should be working with first-party data instead.

In this week's Q&A, ExchangeWire chats with Jonathan Hardy, Adara's vice president of sales for Asia-Pacific, who discusses why some markets in the region remain hesitant to accept first-party data and how the travel data provider handles the more conservative Asian community.

EW: How does the Asia-Pacific market traditionally target advertising?

Hardy: Advertisers here rely heavily on third-party data purchased by trading desks from data management platforms. This reliance means advertising is targeted based on inferences around consumer interests and preferences, rather than actual knowledge of specific plans and purchase preferences.

For example, a consumer who travels frequently between two or three locations for work may be perceived as a frequent traveller and grouped with other loosely defined "travel intenders". This dataset provides no clarity on what travel those consumers are intending to undertake, for what purpose or when, and is unable to qualify what type of complementary purchases different types of travellers may be inclined to make.

Jonathan Hardy, Adara's Asia-Pacific vice-president of sales

Third-party data can also be months out of date, so if a consumer's habits have altered due to a change in personal circumstances like a new job, they will still be targeted based on their previous movements and habits.

Advertisers also tend to work with generalist trading desks and broader platforms in order to place ads. These offer successful and technically-sound solutions in terms of the literal real-time bidding and programmatic technology, but where they can sometimes hinder advertisers is in their focus and effectiveness. The proprietary technology developed by industry specialists that is more prevalent in markets such as the US, is written and built around a particular vertical with industry-specific data used to finetune the algorithms used. This approach not only sharpens audience targeting, the insights gathered can even be applied to grow and manage the business through the shaping of existing and new products and services.

EW: How do marketers in this region handle retargeting?

Hardy: Advertisers traditionally rely on trading desks to help put retargeting into practice, but where this approach can fall down is in maintaining a long tail. Initial results of retargeting always show fantastic ROI, but once existing prospects have all been targeted, it can be hard to identify new potential customers with similar interests and purchase preferences with whom to engage.

This is where the use of analytics is currently lacking in the Asia-Pacific region. Having deeper insights would enable marketers and advertisers to go beyond leads that have already engaged with a brand website and start identifying customer profiles to target. When this approach becomes more embedded in the market, campaigns here will start to have a much longer shelf-life.

EW: How open have you found advertisers in Asia-Pacific to be when it comes to new approaches?

Hardy: Asia is, in its nature, a conservative market. That means new approaches or technologies need to be introduced carefully. The travel market, in particular, has seen phenomenal change in recent years, with a rapid move towards mobile and online solutions. As a result, there is some hesitancy to make the wrong investments.

Industry specialism, such as ours, is a relatively new approach in Asia, as there are very few companies that hold a large number of direct relationships and, consequently, offer first-party data.

What we have seen, however, is that our existing relationships with well-known global brands – and, more recently, regional Southeast Asian airlines – have brought confidence to other prospects in accepting a new, more specialist approach to advertising. It is this confidence in a new approach, as demonstrated by peer companies, that has helped us open doors with new prospects, such as regional hotel chains and online travel agencies.

EW: Is the situation the same right across the region?

Hardy: Across the region, as a whole, there is a general lack of understanding among the media community of the different methods of buying and selling inventory, and how different types of data compare. As a result, we often see media buyers asking for inferred, out-dated, third-party datasets when they are being offered real-time first-party information.

That said, the level of education required varies widely from country to country, so it's impossible to generalise. For example, Australia's approach could be compared to the US and Europe, both in its use and understanding of different types of data. Japan also takes a mature approach, although there is a significant fear around data-sharing in this market that can make acceptance of first-party data challenging. China has fully embraced the use of data, but the market itself is insular and functions in a totally unique manner that cannot be compared to other regions.

Many of the Southeast Asian markets have barely scratched the surface of data use, so they require education at the most basic level before progressing to more complex data applications and approaches to targeting.

In order to manage this, Asia-Pacific cannot be considered as a single market, but must instead be considered on a per-country basis. While education may be the common theme, some markets require a complete introduction to modern ad targeting techniques and others only require the adaptation and localisation of materials and content; which have already been implemented successfully in the US and Europe.

EW: How can privacy and data sharing concerns be addressed?

Hardy: These are critical issues that cannot be ignored, especially in more cautious countries like Japan. We have found that the best way to alleviate this concern is through taking a managed services approach; which in itself is the antithesis of a traditional trading desk business model that expects to purchase segment data outright.

Brands and advertisers can still access first-party data insights and apply them to ad campaigns to improve targeting. From our partners' perspective, this approach provides peace of mind that competitors will not be able to take advantage of accessing their information. They know their data is carefully segmented and not made available for broader consumption.

EW: Does that create an opportunity for specialists to work alongside trading desks?

Hardy: There's no reason why specialists and trading desks shouldn't coexist, providing complementary services and building on the existing trust advertisers already have in trading desks in the Asia-Pacific region. Specialists can provide access to first-party datasets to help focus aligned specialist ad campaigns, while trading desks can continue to drive access to inventory.

As datasets continue to grow, it will become increasingly difficult for one platform – be it a trading desk or a specialist – to effectively target ads across all verticals. Building collaborative relationships now will bode well for the future, giving advertisers better bang for their buck and ensuring a viable and long-term business model for all involved.