When I studied marketing, the smartest marketers were the consumer packaged goods manufacturers who relied on market research and marketing tests in order to fine-tune their marketing efforts.
Though consumer packaged goods marketers are still respected, the smartest marketers in the room today are Facebook and Google. They got to be so smart by learning from the data generated by all of the marketers who have run campaigns with them, and that’s every marketer in the world — even the Kremlin.
Marketers — myself included — were happy for the reach/scale provided by the duopoly, which made our lives easier. After all, it’s easier to work with two vendors, particularly if they enable you to reach as many users as the rest of the digital solutions available. So we let them have our data.
But that could change.
With data privacy legislation including GDPR in Europe and the California Consumer Privacy Act, data portability is the law.
Specifically, in the California Consumer Privacy Act of 2018, 1798.100, which will take effect in January 2020, a business must provide a consumer with all collected personal information, and that information shall be portable and “in a readily useable format that allows the consumer to transmit this information to another entity without hindrance.”
Beyond privacy legislation, there are new efforts among legal scholars to redefine anti-trust for the digital age which could challenge Google, Facebook and most notably, Amazon, as digital monopolies in the US court system
Following the high profile scandals, including Facebook’s Cambridge Analytica debacle, the Russian campaign to influence the 2016 US presidential elections and the recent data breach, trust in the leading platforms is eroding. Facebook recently reporting flat growth in North America and user decline in Europe (these scandals are also cited as reasons why Google and Facebook didn’t commit more resources to kill the California Consumer Privacy Act). Twitter also announced a decrease in average monthly users in the company’s most recent earnings call in July.
The declining trust in social platforms coupled with the legal requirement for data portability will empower more users to think about their data and its value. Even companies like Facebook and Google, who would have scoffed at data portability a few years ago, have been partnering with Microsoft and Twitter on the Data Transfer Project which will enable data portability.
With data portability becoming a reality, what are marketers doing about it? After giving our data to Facebook and Google, are we going to be smarter this time around? Here are some ways marketers can take advantage of data portability to improve their relationship with their users:
- Support companies interested in porting user data from Facebook and Google: I have a lot of respect for Google and Facebook, but these companies keep consolidating digital marketing budgets. The best way to create a more diverse and transparent marketing eco-system is to support those companies interested in offering alternatives to Facebook and Google. Whether it’s a decentralized, free and open source software version of Twitter, like Mastodon OR an existing platform looking to gain users, marketers can support the data porting efforts by offering products, services and content to entice users to migrate. And early marketing partners will benefit from real opportunities to build engaging communities around relevant content — like a recipe for a food marketer or beauty videos for a makeup brand.
A great way for marketers to provide support to new or growing platforms is by integrating them with their Loyalty programs and CRM databases. This can provide the new platform with a redeemable way to reward users for their data and actions beyond the service being offered by the platform.
- Content is still King: If there is one category which has been hurt by the duopoly it’s content creators. Whether its publishers or content aggregators who have seen their traffic from Facebook nosedive OR disenchanted YouTubers suffering steep ad revenue declines, marketers and their budgets are strong potential partners for dissatisfied content sources. Though content cannot create a social network or search engine, marketer/content partnerships can provide the gas and engagement for a future platform. And given the engagement rates for the strong and growing user base of Netflix customers or the 250 million user accounts for Disney-owned Massively Multi-Player Online Game Club Penguin at its peak in 2014, I wouldn’t bet against content driving the next platform.
- Wild Cards — AT&T and Verizon: I’m willing to bet that at both AT&T and Verizon, there are teams working on platform-like solutions for taking advantage of the coming data portability. AT&T chairman-CEO Randall Stephenson told investors last month that “the modern media company must develop extensive direct-to-consumer relationships. We think pure wholesale business models for media companies will be really tough to sustain over time.” Given the properties that these two companies already own, and their aspirations to make marketing a major revenue stream beyond what it already is, I would be surprised if we wouldn’t see some platform-play from these companies soon.
Though data portability will not bring about the demise of Facebook or Google, I do believe that marketers have another opportunity to gain better access to user data and relationships through data portability.
That said, it will take a serious effort to break the habits and scale that the duopoly has built. Switching to the greatest, most privacy-friendly and even ad-free platform has only so much value if none of your friends and family are on it. A decade ago, Facebook succeeded in overcoming the early advantage of MySpace, which did the same to Friendster. And before airing the first episode of ‘House of Cards’ in 2013, who would have thought that the entire TV and movie industry would be chasing Netflix.
It will take perfect execution, but thanks to data portability, for the first time in the last five years, there is an opportunity to break the stronghold the duopoly has on digital marketing.