Michael Heine is founder and managing director of .companion. The Berliners are not only consultants for data-based strategy, but also a neutral data agency for many of the first corporate addresses. Together with partner Christian Bachem, Michael has been carrying the Web Excellence Forum, the most important platform for comparative evaluation of digital communication, for many years. Actually, everyone who has something to say comes to the Excellence Fachtage: B. Braun, Bayer, Bosch, Commerzbank, Covestro, Daimler, Deutsche Bank, Deutsche Post DHL, Deutsche Telekom, Evonik, Fresenius, Henkel, Siemens, Merck...and many more.
This interview is about why there is still a lot of room for improvement when it comes to handling data on digital communications.
Michael, before we start - how long have you been involved with data from digital media?
Well, I started at Pixelpark in 1995, the nucleus of online marketing in this country. After a few weeks, two developers came around the corner and complained. Their computer was running the first German website ever for a branded company. The computer was under their desk and it was constantly filling up. This data was really annoying, new data was being added all the time, and they asked if they could delete it. I asked what kind of data it was, and they explained to me what a server is and what a log file is. I get that and think to myself, "Wow, so the Internet is the first medium with a built-in log function." That was very exciting and that's how it started. By 1998, I had e-commerce software developed to integrate analytics data along the marketing value chain. I could now also fancy calling the chain "Customer Journey", but I don't do that, because behind this buzzword hides the principle of permanent monitoring of individual persons. I don't even want to support that linguistically; it's anti-democratic.
Larger companies, even in the midmarket, have enough data to gain all the necessary insights for communication and marketing. Where is there a problem to solve?
So in digital marketing, companies either have no data at all in their own access, or they have far too much data. No data, because they have no interest and no idea. Too much data, because every internal or external service provider offers its own analyses. They then send colorful pictures, often called dashboards, and one evaluation does not match the other. But this is no way for companies to gain control over their content marketing data.
Agencies are highly specialized service providers that have also built up data expertise. Why should the customer himself now also learn to create value from data?
If we agree that progress for companies can almost only be achieved digitally, then this cannot be outsourced. Then it is also clear that insights from digital processes are a very decisive asset for companies. The more data I have, the more insights I can generate. Google is leading the way. I can outsource some or even all of this insight capability, right, but as a company I have to be able to work with my data myself at any time in order to create value from it. In our field, marketing and communications, the contracts with agencies often do not provide for this. From almost all service providers, our clients only receive summarized, i.e. aggregated, data. But I often can't zoom in deep enough and, above all, I can't merge it with other data.
The publisher-agency-company triangle has been tried and tested for years. Does this really need to be broken up?
No, that would be presumptuous and wrong. The Bermuda Triangle has its reasons. It works, however one evaluates this functioning, and it will continue to work in the future. The Bermuda Triangle is extremely flexible and resilient; we had to learn that painfully. Everybody points at everybody. If companies, i.e. advertisers, want to bring transparency and verifiability into this, then the only way is to store the data under their own hood, on servers that they control themselves - at least contractually. But very few do that.
Why is the Bermuda Triangle so stable?
For most companies, personal trust in the contractor is still the only basis on which they allocate and manage their advertising budgets. Personal trust is absolutely essential, but it's simply not enough. If you rely on that alone, you do an audit or pitch once every 2 years, update goals and planning - that's it. You simply have to realize that up to 80% of the purchased digital performance, be it reach, be it engagements, never takes place in reality. The vast majority of digital data is invented, falsified or incorrect - fake data. In some cases, this data is completely ridiculous and yet it is used as a business driver. For example, when Facebook explains why a country, such as the UK, now has more inhabitants in Facebook than in reality. This example of the quality of external data is real, I didn't make it up, I have to say (laughs). In 2007 there were laboratory experiments of the American Web Analytics Association, which proved with a scientific experimental setup that the average measurement error of digital measurement systems is 40%. If you're already getting excited, wait a minute: it's plus/minus 40%. So the difference is 80%! Dear people, that digital data are untrustworthy if not controlled is completely normal. If you understand what takes place out there on the net, it's also logical, really not surprising.
Why not surprising?
Well, because fraud and abuse are the DNA of the Internet. "War" is the message of the Internet medium, to quote the media guru Marshall McLuhan. He is a philosopher, a Jesuit from the 50s and 60s, fascinating, I wrote my diploma about him. If you follow his line of thinking today, it goes like this: the Internet was developed for military purposes. At its core, it is a protocol that prevents information from arriving in the event of a nuclear war and from being destroyed in any case - wherever bombs destroy whatever. The Internet protocol is therefore terrific and very useful if you want to send ambulances over the net in a war. But it is also an absolute nightmare if you use it to falsify, lie and manipulate. No matter what you do, it will never go away. That's why the Internet is a weapon. And fraud and abuse cannot be prevented in principle for technical reasons. No chance! Digitally, fraud and attacks can at best be made more difficult, but not prevented. That's why there's this permanent arms race around security, hacking, phishing, ad blockers, and so on. ... or even fraud with media performance data. This has always been the case digitally. In principle, nothing is safe digitally. The Kremlin bought typewriters for its secret services 15 years ago - why? Quite simply, they are not as stupid in Moscow as the "digital naive".
And what does that have to do with online advertising?
On the one hand, it explains why, on a technical level mind you, nothing definitive can be done about fraud and all the surveillance marketing called online advertising. And it also explains why there is actually only one functioning online advertising model, which, by the way, was established even before the first advertising banners: it's called SPAM. Junk mails are simply sent out en masse. The key point is: with zero marginal cost, it doesn't matter if you send 100 or a hundred million emails, it hardly changes the cost. You just have to have the addresses, steal them if need be. So reach hardly costs anything. But why should you invest in quality if you only sell advertising space that proves reach or engagement via data? It's cheaper to just generate 1 billion advertising contacts, some data creature in the randomly reached target group will click. And if it doesn't work, then I'll just call my click farm in Bangladesh - they're really sitting there - and their exploited employees will simulate fake traffic with thousands of cell phones. This explains the abysmal qualities and prices in online advertising.
If that's the case, what else can companies do, should they digitally retreat?
No, absolutely not, that would be suicide. Digital channels are already the only access to some target groups, and their importance will grow despite all the criticism. It's simply a glaring contradiction: digital communication is the same as war, but you can't do without it. Companies have to face the huge challenges associated with digital media, but in a different way than in the past. Companies must gain sovereignty over their data and no longer outsource control of their data to agencies and service providers.
How do companies gain control over their data?
In any case, not by taking a cuddly course. To put it bluntly, the data on digital media performance and content marketing is de facto exported from a war zone. Once you understand that, you know that reliable information can only come from the systems you control. There's no quarter there. Companies that don't stand up for control over their own data will only get hundreds of "apologies" in the future, like college boy Mark Zuckerberg's to all the US and EU constitutional bodies.
Companies can gain control physically, through their own servers. But they can also gain it only legally, through contracts, which is what we recommend. In the end, the practice is a mixed form anyway, a rented cloud service, as we know from our projects.
Why should companies gain sovereignty over their data?
Because there is extremely great potential for value creation in them. Just think of the efficiency potential that arises when you use your digital budgets more wisely, which in most practical cases means: Increase digital budgets, but do it right!
To do this, of course, you first have to keep an eye on the impact stages of digital communication. You can't do that if you don't get the data produced with your own money out of Google, Facebook and Co. and combine it sensibly with data from your own systems, first of all your website. Of course, the platform monopolists try to prevent this. They are constantly making covert or overt changes to their data standards. Just last week I saw Youtube reduce the number of exported table columns to 6 from 30. Four-fifths of the data is gone, simply no longer delivered. And what happens? Not a single word about it. This happens every day. We are currently looking at 17 platforms, all the way to China. But there are also agencies that silently boycott transparency because they have no interest in customers who are not dependent. Open conflict with such candidates actually only occurs during contract negotiations. You should recognize them by their contracts.
What specifically should a client stipulate in an agency contract?
...the answer and more in the second part.