Should brands outsource all data storage?
The gloves are off
Tore Steen VP of marketing and business development at Janrain, and Semyon Dukach, CEO and chairman of SMTP Inc., discuss whether brands should outsource all data storage.
VP of marketing and business development at Janrain, more than 15 years of marketing and business strategy experience
Brands should absolutely continue to outsource data storage. If anything, this will become more of a necessity as brands are inundated with increasing amounts of data from consumers and face the challenge of unifying access to it and leveraging it effectively. The explosion of social networks and the willingness of consumers to share social profile data with a brand has led to a situation that can be described as a "good problem to have."
When a consumer signs into a site using his or her Facebook or LinkedIn profile, multiple fields of data are passed to a brand. Information that would have been impossible to collect a few years ago without a lengthy registration form now is available in seconds. This includes demographic information, interests and friend lists.
Complementing the user information gleaned from a sign-up process is data collected from on-site activities, such as purchases, reviews and comments. Add to this historical data, as well as multiple access platforms such as the Web, mobile, tablets and game consoles, and the critical need for unified data access quickly becomes apparent. The ability to create personalized and targeted experiences that consumers find engaging, wherever they interact with your brand, are possible only if the breadth and depth of data available to marketers is leveraged effectively.
In the context of increasing data availability and the need for unified access, it becomes clear that the data is the asset, not the storage infrastructure. Cloud computing services provide the scale and flexibility for evolving data storage requirements. Like any outsourced technology, and even more critical for user data management, the selection of a best in class technology company is vitally important, and marketers should be sure to take the process very seriously. Companies should evaluate a platform based on its core technology, integration with other systems, security measures, use by other large brands and company viability.
It's important to recognize that the data requirements will continue to grow in complexity as brands acquire more users and have access to deeper levels of data about each user. Building the internal infrastructure to store a growing amount of data doesn't make sense. Brands need to be able to focus on the strategic use of that data.
CEO and chairman of SMTP Inc., more than a decade of email marketing and technology sector experience
Brands should continue to outsource some management and data storage, but like most good ideas, data outsourcing can be taken too far. There are compelling arguments for relying on cloud providers to host both computing and data needs, but your most strategic data assets should still remain in-house unless absolutely necessary. For instance, an outside email delivery service should be able to send your messages over the Internet to receiving Internet Service Providers (ISPs) to improve deliverability, without actually taking over your entire email contact list.
The common sense "need to know" test applies here. There's simply no need to ever hand something as strategic as a single file containing your entire list of email contacts to an outside organization, no matter how secure that organization claims to be. By definition, storing that file outside your firewall increases the chance of it ending up in the wrong hands, especially if it remains somewhere for an extended period of time.
If you can meet your outsourcing objectives without doing that, why take the unnecessary risk? Any email you send has to contain the recipient's address, so in theory it's always possible for someone to steal address data since email is fundamentally an open protocol. That doesn't mean you have to increase risk further by handing over your entire contact list to an outside organization in the form of a single juicy file.
Even though it's always possible for a thief to break in through your windows, you don't leave the door open. In the case of email addresses, there's also the question of control.
Another reason to avoid outsourcing all aspects of data storage is email delivery. Whether an address is truly opt-in is often the subject of some debate.
Reasonable people can disagree on whether a particular check box on an order form did or did not constitute a proper opt-in procedure. However, if a small fraction of your email recipient list hits the spam button, do you want an ISP to decide whether your entire list must be asked to opt-in again, or do you want to make that decision internally? By all means, outsource to reliable providers. Just don't ruin a good approach by pushing it to a risky extreme.
Direct Marketing News' Decision
Brands should continue to outsource their customer data storage with trusted third-party service providers. However, they must carefully verify their partners' work and security processes regularly. In the recent Epsilon breach, only 2% of all files were accessed, and hackers failed to obtain personally indentifiable information.
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