What types of alternative data should digital marketers focus on?

Credit and debit card transaction data, as well as IoT data, may be two of the best alternative data sources–not only for investment managers, but for advertisers, too.

Though it did help hedge funds make investment decisions once upon a time, alternative data goes way beyond using satellite imagery to individually count cars in parking lots. In fact, it goes way beyond that. 

Nowadays, investment firms cite credit and debit card data as one of the most effective and accurate sources of alternative data for making investment decisions–and other growing sources, like IoT data, are setting the stage for future reliable returns.

And it’s not only investment firms that benefit from alternative data. Digital marketers do, too.

Today, there are various sets of data to choose from–everything from geolocation data, to web scraping data, to email receipts–for investment firms, and increasingly, for advertisers looking for alternatives to cookies. 

For now, we’ll spotlight two that we believe hold promise for digital marketers, beginning with transaction data.

Credit and debit transaction data

Transaction data–provided by credit and debit card companies–can help fill the gap left behind by cookies. Transaction data can form the backbone for audience segmentation: whether advertisers are looking for high spenders in online home goods, buyers who like meal delivery services, or spenders who frequent fast-fashion ecommerce websites, credit and debit card data helps marketers find granular audiences that can be location-specific as well.

Not only can these audiences be more useful than cookies–after all, you’re not just seeing where a prospect browses, you get to see where prospects actually put their money and make purchases–but in the fight for privacy, transaction data comes anonymized and pre-packaged.

A top-cited tool among investment firms for its accuracy and predictive potential, transaction data is also a great source of data for marketers–both currently, and potentially even more so in the future.

IoT data

Last year, there were about 42 billion active IoT devices worldwide. And that number is only going to go up.

There are far more things than can connect to the internet beyond just mobile phones and computers. Cars, refrigerators, lightbulbs, thermostats, door locks, and speakers all come in “smart” varieties–and consumers are increasingly drawn to them. For marketers looking for data beyond the phone, these smart-”things” can become an important set of data.

Using the data gathered from smart watches and smart fridges can give you great insights on your audience’s lifestyle and help you with your segmentation. And the troves of IoT data are only going to increase–Emarketer estimates that by 2025, users will spend up to 45 minutes a day with IoT devices–and we’re seeing one of the most popular IoT devices, CTVs, in the race to replace the traditional TV itself.

Alternative data sources, overall

Ultimately, cookies going away doesn’t spell the end of accurate, useful data. If anything, it’ll lead to more creative solutions–and better ones, at that. In the end, cookies were not all that great to begin with. 

As marketers and data providers strive to achieve privacy-compliant, and yet effective sources of data, using data that comes from transactions–where prospects actually spend their money–and from the bluetooth in their cars, and even their smart speakers–can help marketers find more accurate, useful places for data.

Let’s not forget that alternative data sources range far and wide. Marketers can go far beyond transaction and IoT data. There’s geolocation data, web-scraped data, and social analysis data to look at, too. And with AI and machine learning only improving, this data becomes easier to analyze and understand. 

The future may not include cookies. But there are far more appealing treats to be found in alternative data.