In this three-part series, we are exploring the ongoing and upcoming changes to data privacy laws, and sharing insights on how marketers can prepare for these updates. In the first blog of this series, we discussed how advertisers can adapt to these changes that are impacting the industry. In this blog, we will focus on how marketers can leverage first-party data to gain valuable user insights, despite the upcoming restrictions to third-party tracking.
Support for third-party tracking technology across websites and apps is ending, and compliance with legal regulation impacts our ability to collect ad performance data. Targeting, campaign optimisation, copywriting and creative design are all becoming increasingly automated, and are far more sophisticated than manually managed activities. Now every advertiser has the same platform technology at their disposal, which has levelled the playing field – but thankfully there are ways to combat these issues.
While the crackdown on third-party tracking may sound daunting to some, there is an opportunity here for marketers to reinvent their approach to data, privacy and measurement. This can encourage advertisers to adopt best practice data capture strategies, build first-party relationships with consumers (where possible), test different ways to activate their data and develop measurement methodologies in preparation for 2022.
How to leverage first-party data
First-party data refers to customer data collected and owned by a company. Information about their customers is compiled through software and systems that the company itself owns, and this data, like purchase history, preferences and behaviour, can be used to create ads, content, and experiences to cater to the interests of individuals.
First-party data can be an incredibly powerful tool for advertisers, as its activation responds to many of the challenges caused by the ending support for third-party tracking technology. So while the future of third-party audiences is uncertain, the role of first-party data for audience definitions is clear and has become a priority for publishers. Take for instance how conversion tracking is looking flakey — now we have first-party data to reinforce cookie-based conversion tracking.
Similarly, digital attribution is no longer enough to measure the effectiveness of digital advertising, but activating first-party data can help address this issue. We can compensate for reduced accuracy in digital attribution by using first-party data to provide better success measures, like customer lifetime value.
Essentially, ad platform technology has levelled the playing field, so your first-party data is a unique asset that will really set you apart from the rest. Only the market-leading advertisers will truly understand how to increase its value, activate it, and reap its benefits. We’ve seen that effective first-party data use in marketing delivers more relevant experiences and can generate double the incremental revenue from a single ad, comms or outreach, and deliver one and a half times greater improvement in efficiency.
A roadmap to increasing “data maturity”
Data maturity refers to the improvement and increased capacity in using data, and there are a number of steps that brands can take to get there. It usually starts with rules-based segments, like clean rooms where data is collected from ‘walled gardens’, Google Ads Data Hub or list uploads.
Brands that will come out stronger from this situation are the ones that are already on the path to reinventing their business practices through the exploration and implementation of new technology solutions.
Move quickly by starting the research
Before you start working with first-party data, exploring the following questions as it relates to your data can help you create a comprehensive plan of action.
- Systems – Where is your first-party data? Digital Analytics, CRM, e-commerce, fulfilment, inventory, Enterprise Resource Planning (ERP) and/or stock, digital assets, call centre and/or customer service? This can include anything that describes the acquisition of contacts and customers, as well as their engagement, value and cost; and anything that describes your products and services. How accessible are these systems?
- Stakeholders – Who is responsible for these data systems? The IT team, Ecommerce, Marketing? Don’t forget about Information Security.
- Schema – What data is available? Can you draw everything out of a system, or just some of the data? What fields are common across systems, and could be used to join datasets?
- Quality – Are these systems well-implemented, and well-maintained? Is the data clean and reliable? Is it continually refreshed?
Moving forward with first-party data
First-party data will be a crucial component for audience definitions. Smarter adtech is levelling the playing field but first-party data is a competitive asset, which Croud can help you maximise. It’s just about creating a step-by-step, comprehensive plan before getting started on your journey with first-party data.