Do Data Brokers Add Value?

Nov 11, 2021

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This week Databowl CEO Simon Delaney and Head of Marketing Daniel Hopewell recorded the latest episode of the B2C Lead Generation Podcast to ask - and attempt to answer - the following questions.

  • Do data brokers add value?
  • What exactly is the value add?
  • How do data brokers make themselves invaluable?
  • How can lead buyers start to understand and measure the value they should be expecting from brokers?

This article pulls together some of the key ideas discussed during the conversation but be sure to check out the entire episode (links at bottom of page).

Okay, simple question. Do data brokers add value?

Yes. They absolutely can do. But only if they are doing it well and in a way that is beneficial to the lead buyer.

They key is that the data broker is working to the benefit of the lead buyer not to the benefit of themselves, and that is the key thing - as a lead buyer - that you need to look at when working with them.

Let’s take that further. What does a good data broker actually look like? How can a lead buyer identify the best data brokers?

Once again it comes back to transparency. That is the key. The data broker needs to always be open, honest, and transparent about the value they are actually giving the lead buyer. And this is how lead buyer can ascertain whether they are or not.

The typical ways in which a data broker can add value would be:

  • Knowledge of the best sources that good data comes from
  • They can act as front loaded DPO (Data Protection Officer) to ensure privacy policies, opt-in terms, etc. are correct.
  • They put the data through a stringent process that ensures higher quality data and gives them a further added value.

If a data broker is doing all these things and can be open, honest, and transparent about the value they add, then the lead buyer can have confidence.

The problem comes when the lead buyer is unable to see these qualities, where there is no transparency, where it isn’t immediately obvious that the data is improved by going through the broker. In such cases, the likelihood is the broker is not adding much value.

So in what case would a data broker not actually be needed?

The relationship between lead buyer and data broker needs to be almost symbiotic, where the success of the lead buyer drives the success of the data broker.

Being a data broker is a luxurious position in the sense they have few risks at the front end as they aren’t generating the leads. Typically, lead generators are putting huge amounts of money at risk when paying huge amounts for traffic on a CPC on channels like Facebook, Google, Native etc. and selling it to the lead buyer on a CPL.

Data brokers are able to bypass that by buying directly from the lead generator on a CPL, selling it on a CPL, and working to the margins. There is actually zero risk, so it’s actually a really great position to be in. Costs are minimal, overheads are minimal, risks are minimal, so if a data broker isn’t working 100% to a lead buyer’s best interests, they inherently remove the value add they can offer.

In that case, they aren’t at all needed. The luxurious position becomes a fragile one IF they aren’t working solely to the benefit of the lead buyer.

How can data brokers make themselves invaluable

It comes to back to the original points made. Data brokers can add value by understanding and having a great knowledge of the sources of data. They need to build strong relationships with good lead generators. This is beneficial to the clients because they only have to manage one relationship - with the data broker - rather than multiple relationships when buying leads from multiple sources.

So logically it follows that the more relationships a data broker has - that is with various lead generators - the more valuable they become.

Okay, we’ve barely scratched the surface here. Ready to listen to the podcast? Check it out on Spotify, Apple, or watch on Databowl’s YouTube Channel.

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