What Is Data Provenance, and Why Should Advertisers Embrace It?
By Gowthaman Ragothaman
Dec 15, 2020
Note: Gowthaman Ragothaman, the guest author of this newsletter issue, is the CEO of Aqilliz, which recently announced a partnership with BritePool, to optimize processes across the programmatic advertising supply chain.
Introduction: The Changing Privacy Landscape
As 2021 approaches, it is increasingly likely that programmatic advertisers will need to change their data handling approach.
The General Data Protection Regulation (GDPR) in the EU — as well as the California Consumer Protection Act (CCPA) and the California Privacy Rights Act (CPRA)— established new standards for data protection. At the core of these initiatives are mandates for how organizations collect, control, and process personal data. Now, national privacy legislation may expand these mandates across the United States.
The Importance of Data Provenance
To meet growing consumer privacy requirements, digital marketers must demonstrate transparency, accountability, and ethics in tracking consumers and serving ads. To realize these goals, marketers must step up measures to guarantee personal data's authenticity and integrity. And that is where the concept of data provenance comes in.
The term "provenance" originally referred to the chronology of ownership related to works of art. It's now used more broadly — in our case, "data provenance" is shorthand for tracking permissions granted by consumers. As more stringent data hygiene practices are required, data provenance will be a critical area of compliance for those in the programmatic space
How Data Provenance Works
My firm, Aqilliz, specializes in the use of distributed ledger technology to create more efficient and transparent use of consumer data in the programmatic ecosystem and elsewhere. The core of distributed ledger technology is data management using blockchain.
Like many emerging technologies, the value of blockchain is often questioned. However, the best way to put this in context may be to note that Gartner's 2019 Hype Cycle for Blockchain concluded that blockchain would be "transformational across most industries within five to 10 years." And, the potential for blockchain to transform the digital advertising business is widely recognized.
Now, Aqilliz has integrated its distributed ledger technology with BritePool IDs (created using hashed emails and other identifiers) to provide both companies' clients with an immutable, tamper-proof record of the entire user consent lifecycle along with historical metadata.
This new distributed ledger technology application allows advertisers to track data origin and movement at various creation and modification stages. With an understanding of who initiated the data points — along with when, how, and for what purpose — data can be validated, and audits can be conducted. This ledger tech can serve as a central pillar of a sound privacy management strategy.
Accountability Leads to Greater Advertising Efficacy
Data provenance, which may be required by regulators, will also benefit marketers. By harnessing trusted data, programmatic advertisers can understand and engage consumers at the right moment, eliminating waste from media budgets. This rapid access to quality data enables programmatic advertisers to optimize spending across the programmatic ecosystem in entirely new ways.
Indeed, Forrester Consulting effectively recognized the high potential value of data provenance. In a report titled, Why Marketers Can't Ignore Data Quality, Forrester concluded advertisers misspent 21% of their marketing budgets due to bad data. When Forrester asked how poor-quality data impacted organizations, 35% said it produced inaccurate targeting, and another 30% said it cost them, customers. In sum, 65% of organizations indicated data quality significantly diminished their marketing activities' effectiveness.
Conclusion: Data Provenance on the Radar
To date, data provenance has received relatively little discussion. Yet, it will almost certainly be required by forthcoming privacy legislation. Simultaneously, the use of distributed ledger technology for this compliance will lead programmatic advertisers to derive higher value from their efforts through value-driven decisions.
Data provenance managed correctly can be a win-win initiative for digital marketers and publishers. In 2021, it should be high on the radar of leaders throughout the programmatic ecosystem.Data provenance, which may be required by regulators, will also benefit marketers. By harnessing trusted data, programmatic advertisers can understand and engage consumers at the right moment, eliminating waste from media budgets. This rapid access to quality data enables programmatic advertisers to optimize spending across the programmatic ecosystem in entirely new ways.