3 Major Barriers Brands Face in Leveraging Real-Time Analytics with Third-Party Vendors


By Tony Ayaz, CEO and Board Member of Scuba Analytics

First-party data is the new imperative for every consumer-facing brand. A brand’s ability to ingest and interpret demographic and behavioral data is the means by which they create worthwhile customer connections and personalized experiences.

In a privacy-first world, brands need to maintain new levels of transparency and control of customer data. In fact, recent research suggests that 76% of customers want brands to do more to control their personal data. In a world of instant personalization and constant multichannel interaction, brands need to analyze and react to this data in real-time.

But here’s the thing: Many brands and marketers currently send their first-party data out to third-party analytics and customer experience (CX) providers in order to derive these insights. As long as that remains the standard practice, the control that brands need over their first-party data—and the speed needed to stay in step with their customers—will be impossible.

Here are three barriers brands face to leverage real-time analytics when working with third-party providers:

1. Sending First-Party Data to a Third-Party Provider Takes Too Long and Keeps Brands Behind Their Customers. First-party data in real-time is essential to make agile business decisions and understand what customers need now. Meaning, by the time brands send data out for insights, they’re already too many steps behind and lose a critical window of opportunity to improve their CX. While many brands tout the richness and the speed they can produce insights, they’re still falling short.

Why? If companies are sending data to a third party, it’s not real-time anymore—and more importantly, it’s not fast enough to be leveraged in all the ways necessary to retain customers.

2. Sending First-Party Data to a Third-Party Provider Compromises Control and Handicaps Essential Analysis. Here’s the reality of any data brands collect: The signals it holds need to be comprehensible to the third-party provider. This requires brands to put data into whatever taxonomy needed for each vendor and each vendor has its own format—which is labor-intensive. Then, there is the friction and potentially crossed wires associated with data delivery, which can be time-consuming and not optimal for a brand’s engineers and analyst teams. Finally, companies have to both interpret insights on their end, and often convert the data back into a form its system can ingest. Taken in the aggregate, all of these friction points combine to make real-time analytics impossible.

3. Sending First-Party Data to a Third-Party Provider Exposes Significant Compliance Risks. Under the emerging regulatory regime, brands that collect first-party data are responsible for it and thus liable for every operation performed on it thereafter. GDPR, CCPA—these are sturdy regulations with teeth and they are just the beginning of compliance requirements brands must consider.

The misuse of customer data—or sharing it with third-party vendors that do—can render brands vulnerable to penalties, fines and legal costs, which can be expensive and time-consuming.

It’s not only the downside risk of a breach or misuse that brands need to concern themselves with; tremendous costs and resources will be essential in order to ensure that no breach or misuse transpires. In this continuous regulatory environment, the sharing of customer data between parties is at best costly and complex and at worst legally hazardous.

Amazingly, sending out first-party data for analytics is still standard operating procedure in much of the advertising ecosystem—and that means many companies are leaving money on the table. But it’s not just a question of money. Careless sharing of data with third-party vendors is not only slow, it could come back to bite brands, too. Non-compliance with GDPR in European countries can result in fines up to 4% of global revenue.

Brands and marketers need to think proactively about how they manage first-party data in a world that is increasingly privacy-first and one that also demands real-time responsiveness from consumers.

Companies need data strategies that enable them to create sustainable and consumer-first activations that delight. And, they need to invest in the necessary infrastructure to make that a reality.

It’s the only way to future-proof data strategy or brands will fall behind.