No Cookies, No Problem: Harnessing the Power of Multi-Dimensional First-Party Data
Anagog is a Street Fight Thought Leader.
While many have said that the deprecation of third-party cookies and tracking mechanisms will have a negative impact on personalized marketing, the fact is that this has finally opened the door to a much more effective approach: making full use of the richness of available first-party data.
“People are like onions…”
Few terms are as buzz-wordy in digital marketing as hyper-personalization. Practically speaking, hyper-personalization means going beyond traditional audience segmentation by using additional data points to create individual marketing opportunities.
After all, humans are multi-faceted; we have layers. Marketers are often given the opportunity to see each of those facets in isolation; web analytics provide insight into consumers’ online behavior and purchase patterns, CRM systems hold demographic data, mobile app analytics track how users behave in the app, and location-based services can shed light on how they live their lives in the real world. Each system can highlight a single dimension of a user’s persona; we gain a deeper perception when we can view the combination of a number of these dimensions.
This is the power of first-party data, data that is collected, consensually, from direct interactions with a customer. Such data is continuously refreshed, collected through everyday digital and physical interactions, and thereby provides a relevant reflection of shifting interests and trends. When such data is focused on mobile behavior, there is an added advantage of coherence. In many households, TVs, PCs and even tablets are shared devices and few users bother to log in to their individual profile. The result is a mess with respect to data collection, with no clear rules that can help arrange the data neatly into separate ‘piles,’ confounding personalization algorithms.
Mobile-based first-party data, however, is overwhelmingly focused on a single user, so the persona that the data describes is a much more reliable depiction of an individual. As we have laid out above, these individual insights are a key step towards hyper-personalization.
Yes, “too much data” is a thing
The problem is that this brings us back full circle to the reasons that Google and Apple pulled the rug from under third-party cookies and tracking IDs: the growing consumer pushback to the amount of personal data collected and the way it is being used. Consumers find the amount of data about them that can be sold to the highest bidder disturbing — and with good reason.
Companies have become somewhat addicted to collecting embarrassing amounts of data about consumers, even when they don’t always know what to do with it. One industry study found that, on average, 55% of data collected is “dark data,” data that is regularly collected by organizations without serving any purpose. This is not simply a matter of inefficiency, it’s a matter of security; even unused data can be targeted for theft by hackers. As awareness grows, the uncertainty regarding how much data is being collected, which data is being used, and for which purpose, is fueling the reluctance of consumers to opt-in to personalization, even though the overwhelming majority of them appreciate its benefits.
Furthermore, as demonstrated by dramatic news headlines, the ease with which data, once collected, can then be accessed without authorization is alarming. The ensuing pressure on lawmakers gave way to privacy regulations that are sufficiently harsh to cause severe headaches for corporate executives. So now, companies have become skittish when it comes to personalized marketing initiatives and they are genuinely concerned about reaching their hands for the hot potato that is personal data. While the potential benefits of a hyper-personalized customer experience are considerable, these companies have come to realize that the cost and exposure associated with becoming custodians for personal data may outweigh those benefits.
Regain control and pass it on
Indeed, such an array of multi-dimensional first-party data, if left unchecked, wields tremendous power over any individual user. So what would it take to regain control over this powerful genie that has been let out of the bottle? As surprising as it may seem, the solution is literally in the palms of our hands. Instead of the complications and legal exposure associated with uploading various types of data from every one of your users to a single database in order to analyze it, new Edge AI technology allows you to keep each individual’s data on their individual device and have it analyzed there. Goodbye data collection; say hello to data concentration. This provides a number of benefits.
For starters, we remove the high costs of storing, aggregating, operating, securing, and integrating different online databases in compliance with evolving regulations. Many companies struggle with the silo-ized nature of their data sources, which prevents them from gaining the rich insights they were seeking. A lot of the most valuable, relevant and accurate first-party data, such as mobile app behavior, browsing, and shopping is generated on the mobile device anyway.
Limiting the access to data by analyzing it locally, on the phone, also alleviates the concerns of users about allowing access to sensitive personal data, such as locations, only to have it hacked or abused. Obtaining that permission allows you to supercharge your hyper-personalization with real-world interests and real-time actions. It also makes it much easier to grant users the GDPR-mandated right to modify or remove their data. By giving consumers control over their data, you build the foundation for a trusting relationship.
This distributed approach to hyper-personalization saves storage, processing, and data transmission costs by leveraging the phone-shaped supercomputers that never leave our side. The bonus is that all decisions and actions related to mobile engagement are made in real-time, impervious to the coverage and latency issues that still plague most mobile networks.
All this means that with Edge AI, companies can serve up hyper-personalized offerings to users at exactly the right time and place and without knowing who those users are. In the past, this was thought to be too good to be true; companies are now realizing it is even better than good and absolutely true.
Make the Right (and Smart) Decision
The final argument (which some would consider the most important) for keeping personal data on the device is ethical. After all, personal data is simply the means to an end: achieving a more personalized relationship with consumers that will create value all around. Companies need to make sure that the right, targeted, relevant message reaches the right consumer; there is no need to retain personal data about any individual consumer.
A trusted brand has plenty of opportunities to access multiple types of first-party data with their customers’ consent, but few consumers will ever feel truly comfortable knowing that someone has all the pieces to their personal puzzle. By adopting technology that avoids collecting data while still enabling hyper-personalized engagement, companies can clear the way to take full advantage of the multi-dimensional, hyper-personalization playing field that is first-party data.
Sefy Ariely is head of marketing at Anagog.