The Growing Importance of Retail and Second-Party Data
Change on the digital advertising front was nonstop in 2021, ushering in a slew of opportunities to consider this year. With much speculation over the future of data and consumer privacy, here are some trends everyone, whether advertiser, publisher, vendor, or agency, can get behind.
Retailer data is the new gold
In 2022, it’s clear that retailers will realize they are sitting on a largely untapped gold mine. We’ve all witnessed Amazon’s rise in advertising and their subsequent discovery of how to have their cake and eat it too. Amazon built a destination for online shoppers with customer intent at the forefront. Think about it… how often do you go to Amazon when you want to research or buy a product?
Amazon learned to monetize those audiences as a traditional media business would, and as a result, the giant’s advertising revenue consistently grows by leaps and bounds. Like so much else, Amazon was a pioneer in retail media, and now, other retailers will realize that they have a similar opportunity to seize.
Next year, more retail brands will emulate Amazon when they realize they too have an engaged audience and are sitting on stores of intent data. When they do, they’ll take a page out of the publisher’s playbook to develop strategies for monetizing their valuable audiences and unlock additional revenue streams by serving ads to engaged audiences. Retail brands will first bring these strategies to their logged-in channels, like apps and email, since they are in their control and provide advertisers with engaged target audiences they know and love.
And second-party data is silver
As first-party data takes center stage, we will see a resurgence of second-party data partnerships to help fill information gaps in the absence of third-party cookies. While many are worried about the use of third-party data, second-party data doesn’t have those same issues.
Second-party data is another company’s first-party data, so second-party data privacy concerns will be minimal because the buyer knows from where exactly it came. Therefore, we’ll see publishers and brands with complementary datasets form strong, direct partnerships to create scalable and monetizable audience segments for our new privacy-centric world.
Speaking of direct…
No one in the industry will disagree that programmatic advertising saw strong growth during the pandemic. But next year, I anticipate that we’ll see direct relationships between publishers and advertisers strengthen. With advertisers focusing more heavily on contextual targeting and first-party data to reach target audiences, they will vet publisher partners through the quality of both their content and first-party data.
As a result, we’ll see less intermediaries involved in these transactions, leading to a better understanding of advertising goals, execution on more unique opportunities, and more revenue directly in the publisher’s hands, exactly where it should be.
Subscription fatigue is upon us
Over the last several years, we’ve seen multiple headlines and tweets from journalists who have developed an audience announcing their departure for subscription newsletter services like Substack, where subscribers pay a small fee per month to access content in their inbox. It’s a great trend, but it’s worth asking how realistic this revenue model is in the long term. Will consumers really continue to pay for all these subscriptions? My bet is probably not.
Similar to CTV, consumers don’t want to pay for all the different offerings. In the new year, we’ll see the independent journalist model revert to a publisher model, with small bands of journalists bundling their offerings together to provide added value to consumers. It’s also likely that these independent journalist consortiums will supplement their subscription revenue with email ads. All of this will allow journalists to continue to do what they do best — report — and consumers to enjoy that reporting without breaking the bank.
Heading into the New Year, there are many moving pieces for both marketers and publishers to consider. Navigating 2022 requires focusing on first- and second-party data, building symbiotic relationships, and thinking strategically about how best to capture audiences. As always, we’ll stay on our toes. Happy New Year!
Kerel Cooper is Chief Marketing Officer at LiveIntent.