Rethink / Data

A new data paradigm for a quickly changing world

Buy online, pick up in-store: Up 208%.
Zoom corporate accounts: Up 354%.
Telehealth: Up 4,345%.

As impressive as this growth is, what’s more important is that these changes are here to stay:

• The pandemic has forced many retailers to start or expand their curbside pickup offerings, and consumers plan to continue using these services even after the pandemic ends.
• Many Big Tech companies have suggested that remote work will be a permanent option for their employees, and a survey in June found that 67% of enterprises plan to keep work from home policies in place permanently.
• Currently, a federal bill with bipartisan support seeks to protect access to telehealth even after COVID-19.

As Mary Meeker called out in her April report: COVID-19 is accelerating digital transformation. Through our Data Venture Studio, R/GA Ventures is tracking how the trends accelerated by COVID-19 are reshaping the data landscape.

Davids, Goliaths, and the Data Divide

Consolidation within the world of data was happening before COVID, with more than 50% of the data generated on the internet daily flowing to only 100 companies. Decisions like Chrome’s removal of third-party cookies–while good for consumer privacy–make first-party data even more valuable. The walls of the walled gardens are getting higher.

And while most companies tighten their belts to weather the economic impact of quarantine, big tech is hiring for tens of thousands of open positions. Tech pundit Kara Swisher put it bluntly: “When the pandemic is over, we most certainly should fear the [big tech] industry more than ever.”

But tumultuous times also bring new opportunities. WhatsApp, Venmo, Groupon, Instagram, Uber, Pinterest, Slack, and Square were all founded within the 24 months following the 2008 financial crisis (and also, admittedly, within 36 months of the release of the iPhone). Though COVID-19 has accelerated the power consolidation of walled gardens, it has also created unique opportunities for companies that can collaborate, act nimbly, and earn trust to win with data in this new world. Here’s how:

Collaborate

“We’re in this together” seemed to be the unofficial motto at the beginning of the quarantine. And while this did not turn out to be true, with COVID-19 exposing the deep health disparities in our medical system, this refrain did seem to resonate with two of the biggest rivals in tech: Apple and Google. In April, the two announced a collaboration to build a contact tracing platform to track and mitigate the spread of COVID.

Oxford researchers estimate that 60% of the population would need to use a contact tracing app for it to be effective. But even the countries with the highest adoption rates come nowhere close to this figure. As long as use of these apps is voluntary, adoption at scale will be a challenge. Still, with Apple and Google controlling close to 100% of the smartphone market, their cross-OS app has a better chance of succeeding than an app locked to only iOS or Android.

Observation

The spirit of collaboration is vibrant beyond the fight against coronavirus. In April 2020, Microsoft launched the Open Data Campaign to democratize the benefits of data and “address the looming ‘data divide.’” To support the initiative, Microsoft published data sharing principles, announced partnerships with the Open Data Institute and the NYU GovLab, and began investing in tools, frameworks, and templates to make data sharing easier.

Content publishers are some of the entities most affected by data consolidation, with ad revenue dependent on external ad tech vendors and data brokers. To protect revenues, some publishers have entered into partnerships to share their data and audiences with each other to sell in packages to advertisers directly. Offerings like Zeus Prime from The Washington Post, Concert, and the Ozone Project in the UK show what’s possible when organizations come together to share data for a common goal.

Opportunity

From ad bidding to attribution, collaboration has advantages. Researchers from Google have investigated the impact of data sharing on ad targeting, and concluded that over 98% of advertisers would always be better off sharing data, “regardless of how the data affects competitors’ bids.” And data sharing between organizations like Target and Disney, Hershey’s and retailers, and EA, Mastercard, and Unilever shows how collaboration can help marketers better understand the effectiveness of their ads.

With advances in technology like differential privacy, organizations have the opportunity to make data open while also protecting consumer privacy. There are many startups building businesses on this premise today, and offerings like Google’s Ads Data Hub promise data collaboration in a privacy-safe environment.

Act Nimbly and Contextually

At the beginning of lockdown, people were horrified by the spike in the “screentime reports” on their phones. The feeling was codified forever in the official historical record (aka a twitter moment). As if we weren’t already anxious enough about catching coronavirus–now we have to worry about catching shade from Apple.

Granted, screentime reports are important, especially with the current considerations of including internet addiction disorder in the DSM. But Apple could have been more thoughtful about how to change the framing of this data while everyone is stuck at home.

Observation

The implications of failing to nimbly respond to context go far beyond making people feel guilty about spending too much time on Tik Tok.

Context is especially important within a machine learning context, and there are often cascading effects. For example, a reduction in airline flights has led to less real-time wind data, which means weather prediction models might be less accurate. There are similar concerns with the current environment’s impact on the accuracy of AI models used for inventory management.

Opportunity

The organizations that successfully navigate quickly changing conditions have a common advantage: awareness. With user-facing products and services, this means having established feedback loops. Robust analytics can identify potential user experience issues before they become widespread.

Awareness also means understanding internal decision-making. In machine learning applications, where opacity is already a problem, this is especially important. Startups working on explainability in AI have written on how better understanding the decision-making process of AI can improve resiliency and allow users of these models to appropriately respond to changing context.

Lastly, organizations should have a codified data vision, with principles to support it. By understanding the end goal for collecting and using data, stakeholders within an organization will be better prepared to act nimbly and respond appropriately in quickly changing environments.

Earn Trust

As mentioned earlier, voluntary download rates of contact tracing apps have been abysmal. In fact, according to a survey conducted in June, 71% of Americans say they won’t use COVID-19 contact-tracing apps, with most respondents citing privacy concerns. But the trust problem is not limited to apps. Even when human contact tracers manually call to track down infection, citizens across the country have refused to share information–leading New York to start issuing subpoenas to comply.

Trust in the government is at historic lows. The shortage of this intangible asset is having very tangible consequences as public health officials struggle to contain coronavirus.

To supplement their data, dozens of agencies at all levels of the government have turned to location tracking companies that have traditionally served advertising and other data-hungry industries.

Observation

Though details of the government’s relationship with these companies have largely stayed out of the spotlight, the reaction has been negative when these deals become public. After years of headlines about data breaches and privacy leaks, it’s no wonder that 81% of Americans say the risks of data collection outweigh the benefits.

Opportunity

An organization’s data policies are an articulation of its principles. Marketers should stop viewing data consent pop-ups as legal hurdles, and rather as opportunities to highlight their brand values.

It is critical for organizations to be good stewards of data. Instead of building “digital voodoo dolls” based on activity online, organizations should be guided by data principles that enable them to recognize the human behind the screen.

On average, 30% of a company’s data on a consumer is inaccurate–and one-fifth of companies believe that most (>50%) of their consumer data is inaccurate. A data strategy centered around trust and clear consumer benefit–one that sees humans and not users–will establish relationships that lead to cleaner, higher quality, and more relevant data.

The tools for brands to have more nuanced data relationships based on consumer trust exist today. The International Association of Privacy Professionals recognizes over 300 vendors that can help organizations manage data privacy and consent–many of them startups. Customer data vaults, while still a developing concept, will put the onus on brands to earn–not harvest–consumer data. Projects like Solid (led by Tim Berners-Lee, inventor of the World Wide Web) and companies like R/GA Ventures-backed startup Concord, point to a future in which consumer trust will be a critical factor of any data initiative.

Takeaway

The pandemic has thrust long-simmering tension around data privacy into the global spotlight. Amidst a backdrop of rapid data consolidation and a growing “data divide,” there has never been a better time for organizations to carefully consider their data strategies, tactics, and tools.

Startups, in particular, should lean into their natural advantages: scrappy collaboration, nimble responsiveness to current context, and data practices with trust at their core are the way forward.

Though the future remains uncertain, R/GA is guided by a commitment to creating a more human future. The organizations that are mindful of the human behind the clicks and the keystrokes will be the ones that win with data in this rapidly evolving world.

This article is part of our Rethink / series, built to unpack industry shifts accelerated or created by COVID and the emerging technology that can fuel new waves of innovation.

To learn more and stay in the know, visit ventures.rga.com and follow @rgaventures on Twitter and Instagram.