Best practices for collecting, controlling and capitalizing on first-party data assets
By Amol Waishampayan, Chief Product Officer, FullThrottle
Brands and marketers are feeling the pressure.
In the current economic environment, businesses in every industry are working to achieve more results with less resources. For advertisers, the challenge is to make their media spend as efficient as possible, delivering targeted results without having to cast a wide net and hope for the best.
We know what it takes to increase return on ad spend. The past decade has seen a revolution in advertising, as brands have used abundant third-party data resources to reach targeted audiences and increase sales conversions. However, the future for this solution is unclear. Responding to consumer privacy concerns, governments and major corporations have taken strides to limit the effectiveness of third-party data or eliminate it completely. California’s CPRA and the European Union’s GDPR make it illegal to capture consumer data without their consent. Apple took steps to block third-party cookies on its devices, while Google has loudly announced their intention to phase out these ad tracking tools in the months to come.
Brands now find themselves between a rock and a hard place: while they need to use data to make their media spending more efficient, they can no longer turn to their previous sources. In order for these brands to survive, they will need to change their relationship with data and transition from data scavenging to data farming.
Taking Control of the Data Environment
How did brands find themselves in such a precarious position? As businesses came to realize the value in using data to inform their advertising campaigns, they also realized how easy it was to acquire third-party data. Big data platforms made it possible for brands to purchase relevant data in just a few clicks, ostensibly creating defined, targeted audiences for a product or service.
While this moment may feel like a rude awakening for those brands that relied heavily on third-party data, the reality is that these resources have been losing effectiveness — if they were ever truly effective to begin with. Third-party data has historically been messy and unreliable, lacking the precision truly necessary to guide a modern marketing campaign.
Brands must move on from third-party data sources and focus instead on a more reliable supplier: their own first-party resources. By becoming data farmers instead of scavengers, brands can keep and maintain useful data resources while at the same time constantly generating new information to bolster their campaigns.
Businesses that invest in their first-party data — in the tools and infrastructure needed to collect, store, and analyze that data — will achieve a state of data independence and be able to survive any new policies or changes to the AdTech landscape. Those brands that have already leaned into first-party data now have a leg up on the competition, and slow movers will need to work overtime to catch up.
Best Practices for the Future of First-Party Data
Even for those brands who are working to catch up quickly to the competition, there is a clear path to establishing a robust first-party data ecosystem:
- Identify current data sources: While the challenge may seem overwhelming, no modern brand is starting from zero when it comes to first-party data. Even the most basic data points can prove useful when targeting and refining a marketing campaign. Every business will have customer data, and most businesses will have a database of email addresses from those who have signed up to receive company updates. This basic identifying information can all be aggregated and analyzed to build profiles and provide valuable insights, offering a crucial first step for those businesses that previously relied on external data sources.
- Explore opportunities to find more data: The goal for a first-party data ecosystem is to achieve a complete loop. The data sources mentioned in the previous point capture the customer during their first interactions with the brand; the next step is to follow that relationship through the customer journey. Different brands will have different tools and access points to attain this goal. Website visitation data offers the opportunity to get to know the customer and collect useful data, while other tools like data clean rooms and data filtering can extract important adjacent information to better understand customers and prospects.
- Determine how to extract value from the data: It’s not enough just to have a collection of customer data. Business leaders need to know how to turn that information into action. Sales and marketing teams can leverage the data to design campaigns to test which messages are more effective with each audience or segment. As the business continues to run campaigns and refine their targeting and messaging, they can eventually approach a one-to-one relationship with each customer and drive results accordingly.
No one enjoys having to change a system that used to work perfectly. However, brands and marketers must finally accept that the third-party data solutions of the past will no longer meet their needs. The good news is we know what needs to be done to build effective solutions to harvest more first-party data. Let’s go do it.