Experian explains why loss of signal doesn’t slow demand for targeting data

Consumption of digital media is on the rise, but the supply of high-quality data signals is declining.

“The personalized targeting data points we’ve grown accustomed to are being reviewed,” said Jeremy Hlavacek, CCO of data services provider Experian.

But “every time there is a change in a market,” he said, “there is an opportunity.”

Hlavacek joined Experian in March after more than six years at IBM, most recently as CRO for Watson AI advertising and The Weather Company’s digital media business. He also served as vice president of global automated monetization for The Weather Company prior to the acquisition by IBM in 2015.

Advertisers want better identity data, better segments and a better understanding of consumer behavior,” he said. “So they will move to higher quality, more precise, more accurate and more reliable datasets.”

Hlavacek spoke to AdExchanger.

AdExchanger: As brands begin to rely more on anonymized data signals and AI-based probabilistic models for targeting, will there be less demand for personal data exchanged by Experian?

The demand for targeted, data-driven precision media is growing, and it’s not going to slow down. There are just different use cases. There’s a case for personalized advertising on the performance side of the bottom funnel where there’s a lot of scale, a lot of dollars, and a lot of big companies involved.

AI-based probabilistic models can work well in outreach and upper funnel models. But with that kind of probabilistic approach, you’re not engaging the consumer, and consent isn’t always obvious.

Are you worried that financial data, credit scores and related information will be subject to regulatory scrutiny or that advertisers will decide it’s too risky to use for advertising purposes?

We must always be aware of this. If consumers have a bad experience, they will tell their regulators.

We treat privacy very seriously. Everything we do is consented and PII secure. We closely monitor our partners and we do not share data in risky environments. Experian has a rigid legal and compliance department, and we sometimes struggle with that, but it’s the right long-term approach.

With the push for privacy, what kinds of data companies will be at risk?

Businesses of all shapes and sizes are affected. There are plenty of headlines about Big Tech companies facing fines and lawsuits in the US and EU. But if you’re a small business in California and have an email list, it’s a lot of work to comply with this regulatory burden.

We’re going to find out over time that it’s not so simple to say, “Let’s stop data-driven advertising, because big tech is bad for the world.” You will also find that you are hurting small and medium-sized businesses in some cases.

How does Experian benefit from its Acquiring Tapad?

We are working on translating Experian’s offline data into the digital space. We’ve taken the Tapad Identity Chart and married it to Experian’s offline chart, and are working to bring our team and the Tapad team together under one brand as we approach next year.

Is Experian considering other acquisitions?

Experian is an acquisition company. We’re going to need more connections and more technology to bring this dataset to life in the tech ecosystem.

As we move into a world of consented first-party data, these data-sharing relationships are strongest on the sell side. Many more people are going to have a relationship with The New York Times or Weather.com than with The Trade Desk and WPP. You’re going to see us do more sales-side partnerships.

Are buyers more interested in targeting based on first-party data?

It depends on the market. For CTV, it’s almost entirely controlled by the vendor. For retail media networks, all data comes from retailers. Programmatic open exchange buyers who have been doing things the same way for the past 10 years are probably not pushing for seller-defined audiences.

But as dollars move from open exchange programs to fast-growing channels like retail media and CTV — which are already using the sell-side approach — there’s a chance that CMOs will start saying “Maybe we should do everything this way”.

What is Experian’s position on data clean rooms?

We are agnostic. We chose no clean room. We work with all the names you would expect – Snowflake, AWS, InfoSum, Habu – really in all areas. It reminds me of the early days of DSPs or SSPs, where suddenly there were so many. Are we going to live in a world with 15 different clean rooms? Probably not. I guess it comes down to two, three or four winners.

How does Experian think about a potential recession?

The movement of interest rates has an important effect, and not only on consumer demand. When interest rates are higher, people take out fewer loans and refinance less. Typically, when people take out loans, they use a credit report, so we have an indicator that things have slowed down.

Mortgages, auto loans and retailer behavior are currently question marks.

This interview has been edited and condensed.

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