B2B marketers may be falling victim to third-party data providers that are similar to the mistakes that lead to the economic recession of 2008, according to senior executives from LinkedIn Marketing Solutions.
Speaking at an event for its Canadian customers earlier this month, the LinkedIn execs described what they called the “subprime data crisis,” whereby marketers are relying on programmatic ad networks and vendors that can’t deliver on their promises to reach specific kinds of customers and prospects.
To prove the point, Peter Weinberg said he looked himself up on a site operated by a leading programmatic exchange. It said he was living simultaneously in Cape Coral and West Virginia, was both married and single and aged 35-39.
“Unfortunately, none of that is true whatsoever,” the global lead, market development, LinkedIn Marketing Solutions said during the event, which was live-streamed and uploaded on YouTube. “You can’t do B2B without data, but not all of it is equal. We need to do a better job distinguishing between real data and fake data, useless data and useful data.”
The term “subprime data crisis” is an allusion to the recession depicted in the book and film The Big Short, where low-quality loans were paired with those which had a better chance of being paid off and resold.
“It’s eerily similar to what’s going in the marketing industry: we’re taking fake data, bundling it real data and selling it as big data,” he said. “That movie didn’t have a happy ending and I don’t think this story will, either.”
Another common pitfall, according to John Lombardo, is believing that more data will inevitably lead to better decisions. Lombardo, who is also a global lead, Market Development with LinkedIn Marketing Solutions, said this has already been debunked in studies of the gambling sector, where those placing bets get more confident as they gain more information but wind up losing more money as well.
This helps explain why so many B2B marketers are focused on lead generation activities, he said, versus using their budget to do things that help customers better recognize and connect with their brand.
“Lead gen will always give you a higher ROI than brand building, because it can take six, nine, 12 to tell if it’s working,” he said, noting a LinkedIn study that showed only four per cent of B2B marketers are measuring their results over more than a six-month period, whereas “long data” could give them much better insights.
“The idea you can just optimize lead gen and that’s going to both build brand and acquire customers is insane.”
Instead, marketers should think like an investor who diversifies their portfolio — breaking their budget into 60 per cent that goes towards brand building, for example, and 40 per cent that keeps lead gen programs running.
As for the subprime data crisis, Weinberg said the solution might come from looking at the supply chain management sector, which learned that reducing its harmful impact on the world came from reducing the steps it took to get products from development to end customers. Marketers should be looking to streamline in similar ways.
“The more hands the data passes through — if you’re buying data from somebody’s who’s buying data . . . that’s there the accuracy starts to decline,” he said. “If the vendor can’t explain to you in a single sentence where the data came from, I thin that’s a red flag.”
Earlier this month, LinkedIn added an Audience Engagement Category to its Partner Program, which included audience discovery features allowing companies to discover new audiences who have high engagement with topics and articles related to their industry. It also introduced content recommendations to inform marketers on what to post and who to target on LinkedIn
The full hour-long talk with LinkedIn is embedded below.