The advertising, media and entertainment industry relies on a wealth of consumer data to understand how to best personalize each consumer’s experience. However, that data is spread across the different tools, teams and technologies used by these companies. And businesses are reluctant to share data with each other due to increasing consumer privacy concerns and regulations. Organizations also lack the infrastructure for new technologies that would help them better share and collaborate on their data with other departments and partner organizations. As a result, media companies and publishers are unable to maximize their advertising revenue, and their advertisers are unable to optimize their ad spend and track attribution.
However, today there are four major trends transforming advertising, media and entertainment to address these challenges. Let’s explore each to see how organizations can prepare for and leverage these trends to enable better customer experiences and drive revenue.
1. Data collaboration is a business necessity, with organizations increasingly adopting data clean rooms
Tough competition, market pressures and consumer demand for personalization is forcing media and entertainment companies to collaborate on and analyze data from a wide range of sources more effectively. The goal: to create a 360-degree view of subscribers, improve advertising effectiveness and optimize business decision-making. To achieve this, industry leaders are securely collaborating on their data in near real-time in the cloud, bringing together data sources from websites, CRM systems, online streaming, advertisements, social media and more. These organizations are also increasingly turning to data clean rooms when strict privacy, governance and query controls are required. We can expect to see wider spread adoption across the industry of data cleans room technology.
2. Increased adoption of data-fueled technologies
Consumer behavior continues to evolve, in response to and driven by new innovations in technology. These innovations are creating massive volumes of fast-moving data and fueling business efficiencies and improved customer experiences. Examples of new data-fueled technologies include:
● Data clean rooms enable two or more organizations to securely analyze and collaborate on data across clouds and regions without exposing the raw data to one another. It’s becoming an invaluable tool for customer analysis because it allows user-defined rules for querying data and maintains the highest level of data governance.
● Artificial intelligence (AI) leverages a wide range of data types, companies are increasingly using AI to better inform content, personalization, subscription, channel, pricing and marketing strategies with new capabilities.
● Cloud-native apps allow advertising, media and entertainment companies to provide subscribers with new and improved experiences, power data analytics faster, and more. Flexible, scalable, cost-efficient and easily managed cloud-native apps make them a great option for this fast-paced, highly competitive industry.
● Cloud gaming driven by growing 5G adoption supports increased power, speed and connectivity across devices, improving the customer experience and allowing the translation of data into near real-time insights and actionable intelligence. According to a recent Forbes article, many predict “cloud gaming will become the ‘killer app’ for 5G in the same way that streaming video was for 4G.”
And, a recent Ericsson study concludes that 5G is now on its way to mainstream adoption, with penetration rates moving beyond 15%.
3. Increased focus on data privacy and governance
Trust is key for consumers. They continue to want greater privacy and to have their data protected by strict standards of governance. The sheer volume and velocity of data created by ad, media and entertainment companies requires a more agile, comprehensive approach to managing data. Here are some priority areas:
● Data privacy regulations: Consumers and governments are increasingly becoming more savvy about how personal data is being used, and consequently, are demanding more privacy for that data, via, for example, GDPR, CCPA and CPRA regulations. In response, lawmakers are imposing tougher regulations on companies that handle consumer data, with more regulations slated for 2023.
● Data security: Customers face increasing threats of identity theft and unauthorized use of their data, making security a top priority for companies that handle it.
● Deprecation of third-party cookies and other common identifiers: Traditionally a valuable source of customer data, regulatory pressures and shifts in how media and technology companies are doing business is threatening the existence of third-party cookies and other common identifiers, like mobile ad IDs and IP addresses.
Essential to the success of advertising, media and entertainment companies will be applying stringent governance, privacy and security measures while ensuring the ongoing ability to share and collaborate on data. As a result, companies across the industry will need to invest in an infrastructure and tools that allow them to share and collaborate on data securely and efficiently.
4. Advertisers embrace advanced analytics, data science and third-party data
Ad spending in the U.S. is down. November 2022 marked the seventh consecutive month of advertising spend decline as a result of inflation pressures, budget cuts and business strategy pivots. To succeed in this market, companies must prove the value of their investments and attain data-driven insights on where to spend for optimal return on ad spend (ROAS).
As a result, we will increasingly see companies look to glean deeper insights through advanced analytics such as AI and machine learning that can be applied to the data and drive smarter advertising decisions. They will also leverage data science, bringing together large amounts of data to optimize customer engagement and identify opportunities to increase the customer lifetime value.
To further improve insights and the customer experience, advertisers will look to enrich their customer profiles with third-party data, such as weather, geospatial and demographic data, to create enhanced 360-degree customer views and power better business decision-making. According to McKinsey’s “Next in Personalization 2021 Report, “76% of consumers are more likely to consider purchasing from brands that personalize.”
To learn how you can harness the power of data and deliver highly personalized content and experiences to your consumers, visit Snowflake for Advertising, Media, and Entertainment.