First-Party Data Provides Opportunity for Marketers to Innovate
Over a year ago, Google’s announcement that it would eliminate the use of third-party cookies by 2022 put the entire ad industry on notice. And while the deadline for this shift has since been extended to 2023, the imperative to find and implement a privacy-safe targeting alternative to the cookie has not changed.
The truth is, third-party cookies were never exactly infallible, and the ad tech industry has made great strides toward developing new solutions that better serve the interests of consumers and advertisers. Companies like The Trade Desk, LiveRamp, and over 80 others have introduced new identifiers to mitigate the dependency on cookies — and help advertisers prepare for the void to be left behind.
But for brands looking to test the new IDs entering the market, one question looms: How do we continue to effectively target and engage consumers across channels, all while adhering to emerging privacy standards?
The answer lies in a strong first-party data strategy.
Get Acquainted with Your Customers
The evolving privacy landscape is reinforcing what we as marketers have always known – nothing is more valuable to a brand than a one-to-one relationship with its customers. Without third-party cookies to fall back on, direct connections with current and prospective customers — and the first-party data points gathered from those relationships — will become critical to facilitating targeting and personalization in a privacy-safe world.
Built around a consumer-first philosophy, direct-to-consumer brands have a strong understanding of, and unmediated relationship with, their customers – so it’s no surprise that they have seen so much success over the last decade. They home in on creating one-to-one experiences and collecting data on consumer preferences, ultimately making their marketing more direct and effective.
More than Hype: First-Party Data is the Path Forward
Creating a core, first-party data foundation is a natural next step once you’ve started to form direct connections with your audience. In fact, first-party data has never been more important to a brand’s success — and without it, brands can anticipate an uphill challenge. First-party data is not only the most accurate data asset to leverage but it also enables marketers to better understand their core audience’s preferences and build stronger customer relationships over time.
The benefits of a strong first-party data strategy extend far beyond the current cookie conversation. Marketers can leverage first-party data to target specific audiences in multiple channels, while reducing dependency on third-party vendors and walled gardens. It also provides flexibility to test and measure addressable campaigns. Why is this important? Without relying on third-party measurement, cross-channel optimization and attribution become possible, increasing ROAS and efficiency. For brands that are lacking enough first-party data to conduct effective advertising at scale, it is important to tap owned channels and third-party partnerships to build out – and start reaping the rewards of – a strong first-party data asset.
Strong First-Party Data Assets Start with Trust
Though the inherent value of first-party data is not a new concept, many brands are prioritizing a first-party data strategy for the first time. There isn’t a one-size-fits-all strategy when it comes to first-party data collection. With 59% of US adults reporting concerns about the ways companies use their personal information, it’s crucial to prioritize transparency and trust when building a strong data asset.
Consumers are more privacy-aware than ever before. They expect brands to be upfront about what data they collect and how they plan to use it. Once those terms are outlined, it’s imperative to capture explicit consent – in a recent Fluent Pulse survey, we found that 71% of consumers believe it is important for brands to ask permission before sending communications.
Make It a Win-Win for Consumers
Despite concerns around data privacy, consumers are ultimately willing to trust brands with their personal information so long as a clear value exchange exists. Meeting that expectation will only help to increase the quality and scale of your data set. For publishers, that means producing relevant, high-quality content. For brands, it’s all about understanding consumers’ needs and highlighting the incentives that come from sharing data.
When coupled with compelling offers like free trials and discounts, advertisers can leverage quizzes, sweepstakes, and surveys to collect opt-in data from consumers. This type of value exchange is a win-win for all parties – brands gain insight into consumers’ interests and preference while consumers receive valuable offers and more personalized advertising experiences.
An Opportunity Awaits
It’s time to put panic in the rearview and look at the changes around us as a reset — a chance to get back to basics and build a first-party strategy from the ground up. Start by leveraging data partners, and experiment with different data collection strategies to find the best path forward. Seize the opportunity to communicate directly with customers, respond to changes in consumer sentiment, and create better experiences.
The loss of third-party cookies need not spell disaster for the digital advertising industry – it’s an opportunity to adapt and improve. The time has come to embrace first-party data and a consumer-centric approach to advertising.
Brian Hogan is President of Data Solutions at Fluent.