WTF is the Data Transparency Label?

This article is a WTF explainer, in which we break down media and marketing’s most confusing terms. More from the series →

The Interactive Advertising Bureau is taking a page from the government’s oversight of nutrition labels with a new effort to bring openness to the data used in digital advertising.

The IAB’s Tech Lab is developing a Data Transparency Label, with the aim of making it easier for advertisers to find the information they need to decide which data to buy and from whom. Here’s a primer on how this Data Transparency Label could help reduce some of the risks inherent with using data one doesn’t own.

WTF is the Data Transparency Label?
The Data Transparency Label is a standardized labeling system that ad tech vendors can use to clarify the quality of data they sell. Similar to a nutrition label, the Data Transparency Label reveals to advertisers previously hidden details, such as where the data came from, how it was collected, whether it was manipulated or modeled, along with any rules for defining it for a particular audience segment. A total of 20 standardized fields appear. Each field is intended to give marketers, agencies, data providers and publishers a clear outline of what’s in data segments and allow industry players to employ a common taxonomy.

Why does the industry need another standard?
Granted, advertisers should have been already asking their data providers for such details. But now the creation of a standardized labeling system will let everyone involved in a programmatic deal, whether the publisher, ad tech vendor or trader, know exactly what’s in the data segments involved.

Why will the Data Transparency Label benefit advertisers?
With fallout from the implementation of the EU’s General Data Protection Regulation and the passage of the California Consumer Privacy Act, global advertisers are having second thoughts about how they target audiences online. For example, American Express wants publishers to provide an alternative with their own data (which people have already consented to share with advertisers), while other companies like Nissan are threatening to drop any ad tech vendors with shady data practices. For either approach to work, media buyers must conduct an audit of the publisher or vendor they’re buying from. The presence of the Data Transparency Label will mean advertisers can access the information they need to start an audit in a way that allows them to compare different vendors with one another.

Will the Data Transparency Label benefit only advertisers?
The Data Transparency Label could have a big impact on publishers. As use of second-party data (which is typically the property of media owners) becomes more popular, marketplaces that sell it are emerging.

“With third-party data now in decline, this gives back the power to publishers as they become the only party in the ecosystem that can collect, process and segment user data,” said Amit Kotecha, marketing director at data platform provider Permutive. “We believe all publishers can become data providers of [information from] their own first-party audiences. Instead of trading media with third-party user IDs, the advertising industry will trade media through audience IDs.” He added, “The publisher’s inventory will be valued based on the quality of their data and their audience.”

The Data Transparency Label sounds interesting. Where do I sign up?
Data brokers 3W.relevanC, Dstillery, Epsilon, Hearst Magazines, LiveRamp, Meredith, Neustar, Oracle Data Cloud and Pandora are among the first batch of companies to try out the data transparency label. Since the initiative launched in the summer, nearly 20 companies have either started the process to adopt the new labeling system or completed a formal compliance program for it, said Dennis Buchheim, gm of the IAB Tech Lab. Based on early forecasts, it’s likely the data transparency label will become more widely available in the second half of next year, said Buchheim. In parallel, Tech Lab will continue to promote the initiative via educational webinars and information sessions for marketers and agencies, which will be largely focused on how the additional transparency and segment metadata can be applied to improve tactical data selection and campaign efficiency.

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