Dive Brief:

• The IAB Tech Lab launched a program aimed at making third-party audience data clearer for advertisers, according to news shared with Marketing Dive. The Data Transparency Standard Compliance Program requires information providers to go through an annual business audit to confirm their data labels are reliable, and introduces a standardized marking system that resembles the FDA-required nutrition labels seen on packaged foods.
• The "Data Transparency Facts" label has information to help marketers evaluate the quality of their audience data, including who provided the data, what audience segments are in datasets, how the segments were constructed and the original sources of the information. The IAB Tech Lab's compliance program is available to any organization that offers data, and open to data marketplaces where data are bought and sold.
• 3W.relevanC, Dstillery, Epsilon, Hearst Magazines, LiveRamp, Meredith, Neustar, Oracle Data Cloud and Pandora helped develop the standard. After the companies complete a pilot period, the compliance program will be available to the broader market, per the announcement.

Dive Insight:

The IAB Tech Lab's "nutrition label" and compliance program are intended to make the marketplace for audience information more intelligible for advertisers, helping them to create more direct comparisons among data sources and media channels. Data-focused marketing has become a key strategy for major brands whose advertising reaches millions of consumers among an ever-growing variety of media outlets.

Programmatic advertising, which relies on computerized bids and offers for digital ad placements in real time, has made data quality even more imperative for advertisers. But marketers also have questioned the efficacy of data-driven marketing strategies, with fewer than 20% of agencies and less than half of advertisers expressing confidence in their ability to create insights from data, according to Kantar research.

Currently, advertisers may pay to reach audience segments based on generic labels like "young mothers," but the sources of those data may be unclear, in an example provided by Ad Exchanger. One data provider may gather cookie data from groups of blogs aimed at moms and repackage them as "young mothers," while another data seller may collect information from payments processors. Marketers have to go through a trial-and-error process to see which data help to drive the best ROI, an expensive proposition for smaller companies that have limited marketing budgets.

The arrival of a more rigorous program to ensure quality data also comes amid the introduction of a growing number of data privacy laws, like the EU's GDPR or California's CCPA, that push to make sure online data are collected and applied compliantly by businesses. Groups like the IAB Tech Lab have frequently introduced ad standards and solutions for the industry to adhere to, so it's unsurprising that compliance continues to be a focus as an era of a largely self-regulated digital ad ecosystem closes.

"Data transparency is a table-stakes requirement to ensure responsible and effective use of audience data — and companies that provide consistent access to detailed information about their data will attract more business," Dennis Buchheim, EVP and GM of the IAB Tech Lab, said in a statement.

The IAB Tech Lab's planned annual audits of data providers will help to give marketers more assurances that they're paying for quality audience information. That greater peace of mind will help to support spending on data and data-related services. Sixty-nine percent of marketers said they increased spending on audience data and related activation solutions in 2018, and 78% planned to invest more this year, according to a study by the IAB and consulting firm Winterberry Group.