Audiens founder Marko Maras recently shared his views with Forbes on the possibilities for SMEs to access data from big tech companies like Google, Amazon, Facebook and Apple.
Here’s the article in full —
In 2007, the European Union (EU) payment directive forced large banks to share transactional data with companies that don’t need a banking license. EU regulation payment services directive 1 (PSD1) compelled every country to adopt the regulations. Banks had to use a standard API and share with authorized partners or companies that wanted to build platforms or apps around APIs.
It forced banks to share data with other companies and gave data access to companies that hadn’t had it before. The 2015 revised payment services directive, PSD2, seeks to create a more integrated European payments market, making payments safer and more secure and protecting consumers.
In 2020, the EU began to review the idea of making big tech companies like Google, Amazon, Facebook and Apple also share their data (paywall) with small to medium-sized enterprises (SMEs), which also serves another purpose: to avoid data monopolies.
The discussion for that directive was based on the payment services law centered around the premise that larger companies have an unfair advantage over smaller companies and ensures that EU tech companies share their data with other SMEs.
The benefits of the EU regulation for SMEs — those in the EU as well as those based elsewhere that operate in the EU — and the martech industry, in general, will be access to big tech data. Just like fintech companies benefited from the payment services directive by gaining access to a bank’s data, martech could also benefit from this directive by gaining access to Google, Amazon or Facebook data.
With Google doing away with third-party cookies, first-party cookies became a gold mine. Imagine if you are an SME and you enrich your data with data from the big tech brands!
Now, let’s say you are an SME selling electronics. You aren’t Amazon, but you’re in the same space, and you only rely on your first-party data. As an SME, you don’t have big datasets or rich and extensive customer history. This puts you at a competitive disadvantage.
Imagine how powerful it will be for a small e-commerce company to have access to its customers’ Amazon payment histories. This will allow smaller retailers to have a better understanding of their customers’ online behavior, such as that low converters might need incentives to buy, that high returners will incur extra shipping costs and which data transactions are fraudulent.
Customer data, and the marketer’s ability to fully understand it within the right market context, is critically important to building productive and lasting customer relationships. Here are four reasons accessing big tech data changes the game for SMEs.
Second-party data brings additional context and insights.
First-party data gives marketers a full history of every customer, and it shows what they bought in the store, which pages on the website were visited, how often they used the company’s app, what they searched for and more. But merely focusing on one’s first-party data limits the potential of a business. For example, being able to additionally see everything the customer bought on Amazon in the past five years opens up opportunities to engage further and deliver relevant offers and communications that delight the customer. It enables a company to build a more meaningful audience. Adding customer insights from Amazon allows them to refocus their advertising on their customers’ behavior, which gives them a much more solid marketing strategy. This is the key to delighting newer customers where first-party data is still lacking. Just being able to show a more relevant offer right upfront can make the difference between a sale or a bounce. It’s a small capability that major retailers like Amazon take for granted, but that would enable a small specialist brand to thrive.
Personal data is no longer taboo.
The fact that the EU commission is creating laws for SMEs to access this data is positive. These laws remove the gray areas around how things need to be done. The messages are slowly emerging: Don’t stop marketing. Follow rules that are beneficial for everyone. Build a framework that allows companies to use data legitimately.
Consumers have more awareness of how companies use their data.
Today, great small companies have access to big companies’ data. The EU is still clarifying what can and cannot be done with open data APIs. In general, if customers get relevant value-added services or are informed about it, they don’t mind being profiled.
SMEs are better able to build new services and features.
This is also a value-added benefit to consumers. Here are some examples of services/features SMEs could offer using second-party data coming from the likes of Google or Facebook:
- Recommend products based on what a customer likes on Facebook.
- Curate deals based on a customer’s location fetched from Google Maps.
- Upsell based on Amazon purchase history. For example, you could offer the right printer cartridges to a customer who has just bought an HP printer on Amazon.
- Offer special payment terms based on customers’ Amazon payment history.
Access to big companies’ data can help SMEs stay competitive in a market dominated by giants.
This article first appeared on Forbes.com on May 26 2020.
Marko Maras is an Audiens founder and member of Forbes Business Council.