Third-Party Data May Help Brands Fill Gaps Opened by Covid
The Covid-19 pandemic altered fundamental daily behaviors in most consumers’ lives almost overnight. For some, it had even more drastic effects for better and worse, shifting jobs and spending habits as well as where people go and how they spend their time.
For businesses, the drastic changes of 2020 mean existing data may be unreliable. Ruby Brenden, head of data products at data management platform Lotame, described the stakes of the current situation to Street Fight and gestured toward opportunities to meet the moment.
How has the pandemic affected data collection and data-driven marketing in general?
Covid has accelerated the pace of digital transformation. According to eMarketer, nearly half of US boomer internet users have increased their digital spending since the beginning of the pandemic. This means marketers need to have their data-driven strategy buttoned up to seize these moments to connect with a range of audiences.
Another one of the biggest adjustments for data collection is that what you knew about a consumer six months ago might no longer be true anymore. Priorities and behaviors have massively shifted: People have moved out of cities, lost jobs, and aren’t spending on the items they typically might have been interested in.
How has first-party data in particular been affected?
Before the global pandemic, marketers could make some safe assumptions about how people lived based on available first-party data. But now, our lives are totally different than they were six months ago.
A brand or publisher’s first-party data may say that a person is female, from Staten Island and reads the news on her mobile phone every morning during her subway commute. What it doesn’t tell you is that she now works from home full-time, will be home-schooling her kids for the foreseeable future, shops for groceries online, and is watching more OTT content during her normal commute time. These are all relevant pieces of the puzzle that are missing in a brand or publisher’s consumer profile if they rely on first-party data alone.
Why is first-party data particularly important in general and at this time?
First-party data should absolutely be a priority for marketers because of its relevance and quality. It helps businesses understand their target audience better, locate missed opportunities, and create innovative personalized strategies to increase ROI. But even before Covid, it didn’t provide the scale and depth of consumer understanding that marketers need. Marketers rely on second- and third-party data to fill in the gaps and enrich personas. Today, that’s more true than ever.
Even when you do have quality first-party data, assumptions about who your best customers are can still be off. One of our agency partners discovered that their client was missing connecting with a huge revenue-generating fan base when they just relied on first-party data. The client had created a defined customer profile using first-party data, and while a lot of it was accurate, the HHI information ended up being very wrong. In fact, lower HHIs than were in the profile loved the brand! With the use of supplemental data, they were able to connect with those customers.
How are brands and martech firms navigating challenges to data-driven business?
During this pandemic, daily habits have changed in ways that simply aren’t going to be captured by first-party data alone–from working at home to a huge adoption of ecommerce from older generations. To understand what consumers’ lives really look like now, marketers are turning to third-party data to give them a more accurate picture of what’s going on with their consumers.