The State of Data 2017

U.S. marketers are spending $20 billion on purchasing and activating third-party data

December 13, 2017

State of Data 2017

LinkedIn is proud to be a supporting sponsor on “The State of Data 2017,” the latest research from the IAB Data Center of Excellence and the Data & Marketing Association (DMA). The research was compiled by the Winterberry Group.

"The State of Data" provides the first estimate of the size of the data economy by measuring the investment marketers are making in purchasing third-party audience data to support their marketing efforts and the dollars invested to make effective use of that data.

This total investment in data is at least a $20 billion business in the United States alone.

According to the research findings, U.S. companies will have spent just over $10 billion on third-party audience data in 2017 for advertising and marketing efforts. Additionally, these companies will have spent, just slightly more – $10.1 billion – on third-party solutions to support the activation of this data. This figure covers investment in storing and managing the data, as well as data integration, processing and hygiene, and, finally, the actual analysis of the data, such as modeling and segmentation. These activities are crucial to ensuring the accuracy and actionability of audience data.

This research shows the huge investment that marketers are making in trying to understand who their customers are and how to best engage them.

While the $20 billion investment is significant, it is a conservative estimate, as it doesn’t take into account the additional internal investments in the talent and teams needed to analyze that data.

So, what can we take from "The State of Data" findings?

First, data is a significant investment for marketers, which shows no signs of slowing down. The $20 billion investment highlights the growing need for and importance placed on audience data by marketers. That’s because marketers have a strong desire to better understand customers, learn more about their customer journey, and determine how relevant touchpoints influence their decisions along the way. These data points ultimately flow into marketing decision-making.

One of the most interesting findings is that investment in data is not just about access to the data. It’s also about cleaning, processing, and storing that data in a way that ensures it is accurate, secure, and handled in an ethical way. Companies are spending more money on handling data than on the data itself! A key challenge in the future will be how companies will manage these costs. We expect there will be an increased focus on hiring and developing data talent internally, so companies can manage and analyze this data to deliver its maximum value.

In addition, the figure for data activation likely under-represents the true value of analysis work done by internal teams and rolled into other services, such as those offered by agencies. Data remains of little value without the insights drawn from it that enable effective action. For instance, the Insights team at LinkedIn is central to this practice by taking the well-managed and stored in-depth audience data and turning it into valuable actionable insights for our customers.

The complete study is available for download. And there's more to come. In January, the IAB and DMA will release its second "Data Centric Organization" white paper, which outlines how data is changing how we work.

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Photo: Christiaan Colen

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