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Why Is Data Quality Important?

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April 30, 2019

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Data is a hot topic in the business world these days. Everyone wants to talk about the
insights and value they can derive from data. There’s a good reason for that — data is one
of the most valuable resources available to today’s marketers, agencies, publishers, media
companies and more.

But data is only useful if it’s high-quality. Bad data is at best inconsequential. In the worst
case scenario, it can lead companies to make costly mistakes. IBM estimates that bad data
costs the U.S. economy $3.1 trillion per year. Those costs come from the time employees
must spend correcting bad data and errors that cause mistakes with customers.

Clearly, improving the quality of your data is a big opportunity. Let’s take a closer look
at data quality and why it’s so important.

Topics covered:

What Is Data Quality?

An Example of Good Data Quality

Why Is Data Quality Important?

What Are the Bene ts of Good Data Quality?

How to Collect High-Quality Data

Purchasing High-Quality Data

How Lotame Can Help You Ensure Data Quality

 
What Is Data Quality? 

ENSURE YOU’RE USING QUALITY DATA

Several factors contribute to the quality of data, including:

1. Accuracy
Among marketers who purchase demographic data, 84 percent say that accuracy is very
important to their purchasing decisions. Accuracy refers to how well the data describes the
real-world conditions it aims to describe. Inaccurate data creates clear problems, as it can
cause you to come to incorrect conclusions. The actions you take based on those
conclusions might not have the effects you expect because they’re based on inaccurate
data. For example, data might lead a marketer to believe that their customers are mostly
females in their 20s. If that data is inaccurate and their customers are actually primarily men
in their 40s, then they will end up targeting the wrong group with their advertisements.

2. Completeness
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If data is complete, there are no gaps in it. Everything that was supposed to be collected
was successfully collected. If a customer skipped several questions on a survey, for
example, the data they submitted would not be complete. If your data is incomplete, you
might have trouble gathering accurate insights from it. If someone skips some of the
questions on a survey, it may make the rest of the information they provide less useful. For
instance, if a respondent doesn’t include their age, it will be harder to target content to
people based on their age.

3. Relevancy
The data you collect should also be useful for the campaigns and initiatives you plan to use
it for. Even if the information you collect has all the other characteristics of quality data, if
it’s not relevant to your goals, it’s not useful to you. It’s important to set goals for your data
collection so that you know what kind of data to collect.

4. Validity
Validity refers to how the data is collected rather than the data itself. Data is valid if it is in
the right format, of the correct type and falls within the right range. If data does not meet 
these criteria, you might run into trouble organizing and analyzing it. Some software can
help you convert data to the correct format. For example, if you are collecting data about the
time of day users visit your site, you must decide on the format you will use. You might
choose to use 24-hour time and use two digits for minutes and two for hours. Examples of
this data format would include 14:34, 17:05 and 08:42. Data that doesn’t follow this
format would be invalid.

5. Timeliness
Timeliness refers to how recently the event the data represents occurred. Generally, data
should be recorded as soon after the real world event as possible. Data typically becomes
less useful and less accurate as time goes on. Data that re ects events that happened more
recently are more likely to re ect the current reality. Using outdated data can lead to
inaccurate results and taking actions that don’t re ect the current reality.

6. Consistency
When comparing a data item or its counterpart across multiple data sets or databases, it
should be the same. This lack of difference between multiple versions of a single data item
is referred to as consistency. A data item should be consistent both in its content and its
format. If your data isn’t consistent, different groups may be operating under different
assumptions about what is true. This can mean that the different departments within your
company will not be well coordinated and may even unknowingly be working against one
another.

An Example of Good Data Quality

Let’s say, for example, that you’re a marketer, and you’re crafting a campaign to promote a
brand of organic dog food. You want to determine the best times of day to run online ads to
promote the brand’s web store. To gure this out, you can collect data from the brand’s
website about when people typically purchase dog food on it. Here’s how you can ensure
your data is high-quality:

Accuracy: Since you’re collecting the data directly right from your client’s
website, you can be con dent in its accuracy.
 Completeness: To make sure your data is complete, collect the same
information about every customer. For example, you may want to know what 
items they purchased, their order total, how they paid and the times they
started and completed the transactions.

Relevancy: Only the data related to dog food purchases will be relevant to

your campaign.

Validity: Ensure that you collect all of your time data in the same format.

Timeliness: Import your data as soon as you can and only use data from
within a pre-determined timeframe.

Consistency: If you store your data in multiple places, make sure it is

consistent across all of them.

If your data meets all of these criteria, you can be con dent that your data is high-quality.

Why Is Data Quality Important?

ENSURE YOU’RE USING QUALITY DATA

As data management techniques and technologies improve, data continues to become

increasingly important for businesses. Growing numbers of companies are using data to
make decisions about marketing, product development, nance and more. As more rms
reap the bene ts of data, using it is increasingly becoming a matter of keeping up with the
competition. Companies that don’t take advantage of data and related technologies risk
falling behind. 

For data to be bene cial though, it needs to be of high quality. The better your data’s quality,
the more you can get out of it. If your information is low-quality, it can even be harmful. If
you base a decision on bad data, you’re likely to make the wrong choice.

New technologies are also increasing the importance of data and its quality. Technologies
such as arti cial intelligence and automation have enormous potential, but success with
these technologies depends heavily on data quality. Machine learning, for example, requires
large volumes of accurate data. The more good data a machine learning algorithm has, the
faster it can produce results, and the better those results will be. In a recent survey of senior
executives by New Vantage Partners, more than three-fourths of respondents said that the
increase in data volumes and sources is driving increased investments in AI and cognitive
learning.

Data is becoming increasingly integral to business’ operations. Rather than treating data as
separate from their other functions, some of today’s most successful companies integrate it
into everything they do. This increased integration means that data quality can impact many
aspects of a business from marketing to sales to content creation.

Data quality is also critical because of compliance-related issues. As regulations regarding

data continue to evolve, it’s become increasingly important that companies manage their
data properly. It’s harder to demonstrate compliance if your data is disorganized or poorly
maintained. This is especially vital for nancial data and sensitive personal data but can
apply to other types of information as well.

What Are the Bene ts of Good Data

Quality?

ENSURE YOU’RE USING QUALITY DATA

Good data management is crucial for keeping up with the competition and taking advantage
of opportunities. High-quality data can also provide various concrete bene ts for 
businesses. Some of the potential bene ts of good data quality include:

1. More Informed Decision-Making

Improved data quality leads to better decision-making across an organization. The more
high-quality data you have, the more con dence you can have in your decisions. Good data
decreases risk and can result in consistent improvements in results.

2. Better Audience Targeting

Data quality also leads to improved audience targeting. Without high-quality data,
marketers are forced to try to apply to a broad audience, which is not ef cient. Worse, they
may have to guess at who their target audience should be. When you have high-quality
data, you can more accurately determine who your target audience should be. You can do
so by collecting data about your current audience and then nding potential new customers
with similar attributes. You can use this knowledge to more accurately target advertising
campaigns and develop products or content that appeal to the right people.

3. More Effective Content and

Marketing Campaigns
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In addition to improving targeting, data quality can also help to improve your content and
marketing campaigns themselves. The more you know about your audience, the more
reliably you can create content or ads that appeal to them. For instance, if you’re a publisher
of a sports website, you can gather data that tells you which sports your website users are
most interested in. If you discover that golf is one of your most popular categories, you can
direct your content team to create more golf-related articles and videos. If you nd that golf
is especially popular among visitors to your site who are men between the ages of 45 and
64, you can show golf content to users in this age range when they visit your site. A similar
technique can be applied to content used as part of a marketing campaign.

4. Improved Relationships With

Customers
High-quality data can also help you improve your relationships with customers, which is
crucial for success in any industry. Gathering data about your customers helps you get to
know them better. You can use information about your customers’ preferences, interests
and needs to provide them with content that appeals to them and even anticipates their
needs. This can help you build strong relationships with them. Proper data management
also helps prevent you from delivering duplicate content to customers, which can become
annoying to your audience and damage your reputation.

5. Easier Implementation of Data

High-quality data is also much easier to use than poor-quality data. Having quality data at
your ngertips increases your company’s ef ciency as well. If your information is not 
complete or consistent, you have to spend signi cant amounts of time xing that data to
make it useable. This takes time away from other activities and means it takes longer for
you to implement the insights your data uncovered. Quality data also helps to keep your
company’s various departments on the same page so that they can work together more
effectively.

6. Competitive Advantage
If you have better quality data than your competitors or use your data more effectively than
they do, you gain a competitive advantage. Data is one of the most valuable resources that
today’s companies have, as long as it’s high-quality. Better data quality means that you can
discover opportunities before your competitors do. You can better anticipate prospects’
needs and, therefore, beat competitors to sales. A lack of good data means missed
opportunities and falling behind the competition.

7. Increased Pro tability

Ultimately, high-quality data can lead to increased pro tability. It can help you to craft more
effective marketing campaigns and increase sales numbers. It also decreases ad waste,
making your marketing campaigns more cost-effective. Similarly, if you’re a publisher, data
can show which types of content are the most popular on your site and which bring in the
most revenue. Having this information enables you to focus more of your time and
resources on these kinds of content.

How to Collect High-Quality Data

 ENSURE YOU’RE USING QUALITY DATA
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Collecting high-quality data can be challenging. Problems with data quality may occur when
a company is attempting to integrate data systems across different departments or
applications, implementing new software or manually entering data. They may also occur
because a company does not have the proper tools or processes in place. There are things
that companies can do, however, to help improve data quality. Taking the following steps
can help ensure the collection of quality data.

Implement a data collection plan: To ensure that the data you’re collecting
is high-quality, you need to have a data collection plan in place. Determine the
kind of data you need to meet your goals and the methods you’ll use to collect
and manage it. You plan should also de ne the roles of all personnel involved
in collecting the data and establish processes for how you’ll communicate
between departments on matters related to data. Be speci c in your plan to
avoid confusion and ensure that you can measure your progress.

Set data quality standards: Create data quality standards that you’ll use to
determine which data to keep, which to get rid of and which to correct.
Everyone involved in managing your data should agree on and understand
these standards. This ensures consistency across your organization.

Create a plan for data correction: You’ll need to create rules for correcting
data. These rules should de ne who is responsible for correcting data and the
methods they should use to x it. This is also important for ensuring
consistency in your data.

Plan for data integration and distribution across

departments: Additionally, you should create a plan for integrating and
distributing your data across the various departments within your
organization. Data quality issues often occur at this step, because copying
data, manually editing it or sending it to different software platforms creates
opportunities to alter it. Creating concrete plans for this step can help avoid
these issues.

Set goals for ongoing data collection: It’s important to remember that

improving data quality isn’t a one-time task. Ensuring data quality requires
ongoing effort. Documenting data quality issues can help with this ongoing
effort by ensuring that mistakes aren’t repeated. The focus should be on
continuous improvement of your data collection plan.
Having data management technologies in place can make ensuring data quality much more
ef cient and straightforward. The Lotame data solutions platform, for example, can pull all 
of your data into one place, making it easier to organize it and ensure quality. This allows
you to integrate your data so that you can get a full picture of your audience, more quickly
analyze your data and use it more effectively.

Purchasing High-Quality Data

ENSURE YOU’RE USING QUALITY DATA

When it comes to data you collect directly from your customers, ensuring data quality is, in
some ways, relatively straightforward. Because you gather it yourself and it comes right
from the source, you can be reasonably con dent in its accuracy. You just need to make
sure you have a collection plan in place that ensures validity, consistency, relevancy and the
other aspects of data quality.

This data that you collect directly from your customers is known as rst-party data. There
are also two other types of data — second-party data and third-party data.

Second-party data is essentially another organization’s rst-party data. You purchase it

directly from the organization that collects it. The kind of data is usually considered high-
quality. You just need to ensure that you’re buying it from a reputable company and get
information about the source of the data and how it was collected. Lotame’s second-party
data marketplace can help you to nd reliable data sellers and ensure you have clear insight
into the data you’re purchasing. Second-party data is useful for increasing the size of your
audience and expanding into new markets.
Third-party data is data that you purchase from sources that are not its original collectors.
You typically buy it from aggregators who collect large amounts of data from various 
sources into one data set. You can nd this data for sale on exchanges such as the Lotame
Data Exchange. One of the main advantages of third-party data is its scale. It’s excellent for
expanding your audience. Because of its volume, you can uncover more valuable trends and
insights.

One of the criticisms of third-party data, however, is that because it doesn’t come directly
from the source, it’s harder to verify its accuracy. There are some ways to ensure quality,
however. Choosing a provider with a good reputation goes a long way. Also, nd out
everything you can about the source of the data before you purchase it. See if you can
determine whether it was modeled or validated.

Purchasing third-party data through Lotame can help ensure that your data is accurate. We
offer Precision Audiences, which are data segments that exceed industry benchmarks for
accuracy and precision. These audiences have been validated using a series of proprietary
“continually on” tests. This means you can be sure they are accurate, precise and will help
you to reach your intended audiences. Lotame Precision Audiences are also globally scaled
and proprietary, meaning it’s not available anywhere else on the market.

How Lotame Can Help You Ensure Data

Quality

ENSURE YOU’RE USING QUALITY DATA

The technologies you use and the partners that provide them to you, can play a central role
in your data quality strategy. Working with Lotame can make the work of ensuring data
 quality much easier. The Lotame data management platform (DMP) helps you to collect
accurate, complete, relevant and timely data from a variety of sources. Our DMP then helps 
you to seamlessly organize and integrate it so that you can build effective marketing
campaigns and other initiatives around it.

Collecting your data using Lotame’s superior technology and organizing it all in one place
using our DMP can help you ensure that your rst-party data is high-quality. Combining
this technology with Lotame Precision Audiences helps make sure that your third-party
data is high-quality as well.

Want to learn more about how Lotame can help you ensure data quality and make the most
of your data? Explore our website to learn more about our products or contact us today.

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