In the latest column by Daniel Spears (pictured below), programmatic director, Guardian News & Media for ExchangeWire, Spears writes about how, as a publisher on the buy-side, the power of audience data is an invaluable asset versus overreliance on sometimes questionable third-party data sources.

Would you fuel your F1 car with cooking oil? That may seem a ludicrous question, but too often this seems the way programmatic advertising campaigns are run. Programmatic ad technology has created an amazing opportunity to drive the efficiency of brands’ digital messaging to consumers; yet the potential is too often stalled by a substandard approach to data and targeting – essentially the fuel of the programmatic campaign.

Buyers have become hugely dependent on third-party datasets of unknown provenance, limited scale, and questionable performance. Further to this, where real-time insight can create an accurate picture of the consumer for us, the approach today is still reliant on human assumption. This results in a buyer’s selection of targeting options being driven by segment labelling – and which is how every motors manufacturer ends up targeting the same ‘motors’ intenders’ segments. This has created a significant blind spot for programmatic buyers who are having to use and rely on data without any real guarantee of its source, quality and, subsequently, the results. For the agency and their trading desk, this can lead to a disconnect between planning and delivery functions, and undermine the entire campaign.

A recent WSJ article around P&G’s approach to audience targeting provides an interesting example of the market’s current approach to data. P&G found that their targeting of Febreze ads to dog owners and large families (people who their planners must have instinctively thought were the right audience) actually delivered lower ROI than where they used no targeting, thus broadening out the audience. The question this raises for me is how they selected these audiences to target in the first instance. You deduce from their findings that there must, therefore, be other audience subsets that are more efficient in delivering P&G’s desired outcome. Whilst there is certainly a place for broader brand building, this is an example of how human intuition misses an opportunity to allow the data to identify which audiences are actually most receptive to a brand’s message.

Daniel Spears, Programmatic Director, Guardian News & Media

As a publisher on the buy side, we are in a advantageous position when it comes to audience intelligence. We have a wealth of high-grade audience data to drive our targeting, meaning we’re less exposed to the limitations of third-party data. Quite simply, we can deliver better advertiser ROI through smart application of this as data. Our real-time audience intelligence has already driven significant change in the way in which we engage our audience around our product; and, in launching ‘Guardian Programmatic Audiences’, we create the opportunity for our advertisers to leverage the same audience intelligence to benefit their own business. It means that, for the first time, Guardian audience data is decoupled from a Guardian inventory so as to empower trusted buying partners to deliver smarter, more effective programmatic campaigns across their choice of media.

Our recent work with Eurostar and iProspect proves the value in this approach. The results show that, when used intelligently, publisher data can boost an advertiser’s ROI by multiples. Our wider testing has shown that first-party audience segments deliver better performance (+35%) at greater scale (+600%) than third-party equivalents: beyond which the customers delivered are also more valuable (+50% transaction value).

Over the next couple of years, I expect the premium-end of the data market to evolve at pace. I expect to see buyers demand premium, trusted data as a hygiene-factor and this will be perpetuated by a growing weight of evidence as to its value in driving ROI. Advertisers are already starting to demand more bang for their buck and for the programmatic opportunity to deliver on its promise.