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Would Ad Targeting Regulations Affect Media Spending?

Marketers say no

September 13, 2010 | Retail & Ecommerce | Media Buying

Audience data has become a vital currency for marketers. Offline, use of such data for targeting is old news. In the digital world, while tools like cookies have been around for a long time, marketer use of information—especially behavioral data or info that could be personally identifiable—has come under increased scrutiny from consumer advocate groups and governments around the world.

Regulation by the US Federal Trade Commission or legislation from Congress seem to be a significant possibility, but according to a survey of US marketers by the Winterberry Group, they would be relatively unfazed by such changes in the legal landscape. Asked how it would change their spending habits if restrictive regulations about audience data usage were passed in the next two years, responses averaged just above 3 on a 5-point scale, indicating that “spending would likely remain unchanged.”

Change in Marketing Spending if Restrictive Data-Use Regulation Is Passed* According to US Marketers, July 2010 (scale of 1-5**)

That includes not only offline, where regulation does not seem imminent, but also online. Even spending directly on online marketing data, including audience profiles, is expected to stay the same if not rise slightly.

In eMarketer’s analysis of the targeting landscape, restrictions could help boost spending by clearing the air and make it clear which kinds of data it was safe for a brand to use without fear of consumer—or governmental—backlash. This year, eMarketer estimates, US marketers will spend nearly $1.13 billion on behaviorally targeted advertising.

Marketers use far more data than just behavioral, but the Winterberry Group found transactional data more useful to improving marketing performance than any other type, including demographic, geographic and psychographic. Overall, the Winterberry Group said marketers would more than double spending on online data in the next two years. By 2012, the firm expects them to spend $840 million on audience info.

Data that Is Useful for Improving Marketing Performance According to US Marketers, July 2010 (scale of 1-5*)

“Over the next few years, it’s clear that a substantial sum…will be chasing new marketing and data models onto the Internet, pushing the boundaries of what's now possible with respect to targeting and optimization,” said Bruce Biegel, a managing director at Winterberry Group, in a statement. “This has the potential to make online acquisition and engagement channels significantly more effective and accelerate the shift of even more advertiser spending from traditional to online channels.”

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Check out today’s other article, “The Influence of Mobile on Social Marketing’s Future.”



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