In a time of heightened scrutiny around how companies manage customer data, R/GA Ventures and its parent Interpublic Group of Cos. are rolling out an initiative to connect corporate clients with data-focused tech startups.

The R/GA Data Venture Studio, which will launch in December, is seeking startups that can help clients balance their desire to activate data for advertising and product development with managing privacy and new regulatory requirements like GDPR. In particular, R/GA is looking for innovations in data security, privacy tech, new value-exchange models and regulatory compliance.

The ability to put data to work for clients is a key selling point at agencies in 2019 and has led to billions in acquisitions at the major holding companies over the past five years. Dentsu Aegis bought a $1.5 billion majority stake in Merkle in 2016; IPG acquired Acxiom’s Marketing Solutions unit for $2.3 billion in 2018; and Publicis Groupe acquired Epsilon Data Management earlier this year for $4.4 billion.

“The whole data strategy is in a state of flux right now based on the acquisitions of Merkle, Epsilon and Acxiom all going into the holding companies,” says Greg Paull, principal at R3 Worldwide, an independent marketing consultancy firm. “These types of companies are new to the holding group so there’s been a lot of onboarding challenges to really understand how to optimize these partnerships.”

Omnicom Group has been notably absent from the holding company data-acquisition spree, focusing on strategic data partnerships rather than bringing assets in-house. “We haven’t seen a situation that requires ownership of a data asset,” says Adam Gitlin, president of Annalect, Omnicom’s data technology arm. “If anything, we’ve seen the opposite happen where owning a data asset ends up being a handicap of sorts because on the client side it now introduces a conflict of interest.”

Data science and analysis will be the technical skills most in demand at ad agencies in the coming years, according to a recent poll by Marketing Land. R/GA Ventures plans to make a cash investment in each startup that joins its new data project, and will charge a subscription fee to participating corporate clients. One big focus area for the studio will be to help companies find new ways of giving value back to consumers who opt to share their data.

“We think there will inevitably be a paradigm shift around how companies use data and how companies have to provide value back to consumers on the basis of that data,” says Nick Coronges, global chief technology officer at R/GA. “[Consumers] are going to share data on different terms. We see that as something that’s unfolding now but that’s going to have, over the longer term, a pretty fundamental impact on the marketing business.”

Big companies have been leaning into the idea that it’s important to give value back to customers in exchange for their data. Last quarter, Amazon offered a $10 coupon to customers who downloaded Amazon Assistant, a browser extension that gives the company a detailed view into its users’ web browsing habits. More than half of consumers say they’re willing to share more personal information like location data in exchange for discounts on gym memberships and personalized offers, according to a 2019 consumer survey by the professional services company Accenture.

“I think as you see the increase of ad blockers, there’s going to have to be a trend for consumers to be incentivized to see advertising and share more data,” says Paull.

More companies are harnessing their first-party data to message to existing customers and support advertising strategies. But they are also facing increased scrutiny on their ability to protect customer data.

“We’re getting a lot of questions around what’s the impact of privacy regulations on clients and their ability to market, as well as on our own capabilities and what we’re offering to clients,” says Annalect’s Gitlin.

Europe’s General Data Protection Regulation, or GDPR, fundamentally shifted compliance requirements for publishers and advertisers last year. And the U.S. may be next. Senator Mark Warner of Virginia introduced a bill in June that would require companies with more than 100 million unique monthly visitors to provide their users with an assessment of the economic value of their data and the ability to delete their footprint.

“I expect 2020 will be the year of consumers wanting to take back more of their data, and agencies are going to have to respond accordingly,” Paull notes.

Since launching in 2013, R/GA Ventures has run 16 different programs to connect tech startups with corporate clients across a variety of verticals including sports, media, retail and pet care.

“The Ventures model is a way to look at some of these technology innovations that are very far out on the horizon in a very controlled low-risk way,” says Coronges. “You’re not spinning up new businesses against them yet, but you know that you need to get out ahead of them.”

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