Why Social Data is More Valuable than Ever
With privacy laws and rules stacking up, the ad tech ecosystem is focused on how companies will obtain consumer data and leverage it moving forward.
Sav Khetan, Head of Product Strategy at Tealium, checked in with Street Fight to discuss why the data on social platforms is more valuable than ever, how advertisers can navigate privacy changes, and how customer data platforms can help.
Why is the data on social platforms more valuable than ever?
Consumers are spending more time on social networks than ever before. While it started as an avenue to engage with family and friends, social platforms have evolved to be the primary source of news, content, and shopping. In fact, a recent survey found that 70% of “shopping enthusiasts” use Instagram for product discovery, and 46% of consumers will purchase a product after seeing it first on Instagram.
Consumers are sharing their preferences, brand loyalty, and interests with their likes, shares, and clicks — which is leading to more investment and higher returns for brands in social.
With the changes in data collection driven by the loss of cookies and identifiers, many brands are reformulating their first-party data strategies. The simple method of collecting “all” data from your owned channels is no longer an option. With the increase in data privacy regulations and changes from tech platforms like Apple’s AppTrackingTransparency, brands need to find other alternatives to learn about their customers. In this new paradigm, social platforms offer a great opportunity.
Followers on social networks are voicing their opinions; publicly endorsing brands, content, and products; and openly sharing their personalities. This offers brands an opportunity to launch targeted initiatives that are designed to build a deeper relationship with customers and collect better first-party data. In addition, the opportunity to leverage the data in the public domain to build a better understanding of a brand’s audiences remains as relevant as ever.
Many say privacy changes are strengthening the relative power of the walled gardens and that other companies can’t depend on that data. What are your thoughts?
With regards to walled gardens, the biggest impact of data privacy regulation is on the sharing and selling of data between platforms and services. This has some impact but doesn’t dramatically shift the balance. However, these privacy changes, coupled with the loss of the third-party cookie and device identifiers, have shifted the balance in the favor of walled gardens for now.
Advertisers and publishers were able to freely target individuals across all platforms using the third-party cookie, which made their own data set a small part of a very big universe. For example, an ad for a red sweater could follow us around the web, across all types of platforms and websites. This was so simple that the ROI of having a unique first-party dataset was not immediately obvious, and many brands relied heavily on the shared understanding of the customer.
Going forward, the different data sets will play different roles in the advertising strategy. While it will be hard to walk away from large advertising platforms like Google, Facebook, and Amazon (which make up over 80% of most media budgets), brands will also have to invest more heavily in their own first-party data because the need to have their own understanding of the customer is essential to future growth.
With all the changes in data regulations and cookie activation, customer acquisition costs are climbing higher and higher, so priority and focus is shifting to retention over acquisition — making the brand’s own datasets more important and helping them build deeper and more meaningful relationships with their customers.
How can CDPs help companies manage the data they get from social platforms?
The risk with any well-tooled marketing technology stack is data silos. Each tool or platform creates a profile about the customer based on the data it collects, leading to a fragmented view of the customer in each tool and creating a silo. Imagine a customer likes a red shirt on Instagram. Now, the only way to personalize the next email with an inclusion of a red shirt is to ensure the social platform is integrated with the email platform. If we then wanted to personalize the website on the next visit and show the red shirt, the CMS or personalization tool would also need to know about this preference, which would require yet another integration.
If you extrapolate these integrations for several platforms — email, web, mobile, social, call center, point of sale — it would require an enormous integration effort that is expensive to maintain. As a result, most companies just integrate a couple of platforms and end up with a fragmented view of the customer’s data across all of their tools. This is where a customer data platform comes in.
CDPs are designed to collect, organize, and distribute data. Their primary purpose is to connect to all types of data sources — digital, offline, paid media, cloud systems — and combine the data into a single customer profile, which is made available to every tool in the marketing stack. They are created with the goal of helping all the marketing platforms operate from a single source of truth with regards to the customer profile. The latest behaviors of the customer in any channel can be made available to all other channels in real-time.
So, when the customer likes the red shirt on Instagram, that action is added to their single unified profile and is available to every tool for personalization in real-time. Social platforms are not designed to integrate to several channels at the same time, but the data can be collected by CDPs and distributed to the platforms, making every action in social an attribute for real-time personalization and customer understanding.