Host Noor Naseer and guest Vince Voiro explore all things identity resolution, covering what data is needed to enable it and more.
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“It was love at third sight...”
“I want to be the third to thank you for...”
“Third impressions are everything...”
Third is...okay. But first? First is what we strive for—from the Olympics to the weekly trivia night at your local dive bar. Why should sourcing consumer data be any different?
Since the invention of the cookie in 1994, digital advertisers have grown dependent on third-party cookies for techniques like audience targeting, retargeting, geo-based retargeting, cross-device targeting and tracking, frequency capping, and attribution. But third-party cookies are on their way out, with regulators, consumers, and tech providers alike pushing for advertising methods that prioritize consumer privacy.
And yes, Google may have delayed third-party cookie deprecation in Chrome until the second half of 2024. But regulators and consumer behavior have made it crystal clear that businesses need to prioritize consumer privacy now: 2022 has been a landmark year for data privacy-focused regulation, and regulators are cracking down like never before: just ask Sephora, BNSF Railway Co., or TikTok. With 86% of US consumers saying that data privacy is a growing concern for them, it’s of critical importance for advertisers not to procrastinate on incorporating alternative targeting tactics into their marketing strategies.
While brands and agencies will need to adopt a mix of solutions to move beyond third-party cookies, first-party data will undeniably be one of the main players helping advertisers ensure they are showing messages to the right people, in the right places, at the right times. Below, we’ll outline a few examples of how advertisers can squeeze every last drop of value out of their first-party data. But first, let’s take a look at what makes first-party data a winner in a world that prioritizes consumer privacy:
First things first: the fact that users freely give their first-party data to brands is perhaps its biggest strength. As consumers have become more digitally savvy, they’ve come to demand transparency into how their personal data is used by the businesses with which they interact. This is particularly true of younger generations like millennials and Gen Z: 91% of Gen Z, for example, feel that being able to find out which companies are storing their personal data is a basic human right.
In order to build trusted relationships with these consumers, brands need to be able to provide that information in an accurate and organized way. While the chain of middlemen involved in third-party data collection and storage makes this difficult, it's easier to communicate information about personalization and targeting efforts powered by first-party data (so long as your data house is in order, of course). When it comes to transparency and privacy, first-party data will always come in first.
With almost 90% of consumers likely to enjoy personalized offers, personalization is quickly becoming a key differentiator for brands. And in contrast to third-party data, which is aggregated from a variety of different sources and consequently suffers from low reliability and accuracy, first-party data is highly accurate because it comes directly from users. That means that personalization and targeting efforts fueled by first-party data are more likely to resonate. And from a quality perspective, first-party data can’t be beat: each data point comes with the promise of someone who has demonstrated a clear interest in your brand’s offerings.
Even more, quality personalization efforts can encourage consumers to share even more of their information directly with brands: in one survey from Merkle, 90% of respondents expressed willingness to share more personal information after having a positive experience with a brand. Talk about a positive feedback loop!
Despite its clear benefits, one of the main concerns advertisers have when it comes to first-party data is scalability. While the proliferation of providers makes it easy for advertisers to acquire just about all the third-party consumer data as they are willing to pay for, first-party data is not quite as effortless to gather. That means it's important for advertisers to find ways to amplify the first-party data they do have access to.
To that end, let’s explore a few of the ways advertisers can use solutions like automation and strategic partnerships to boost their first-party data:
If you’re going to leverage your first-party data, you’ve first got to have first-party data. That means investing in a customer relationship management (CRM) platform, which collects and stores information about customers and prospects, from email addresses and phone numbers to information about all your interactions with a certain individual. Think of a CRM as a hub for first-party data, and a reference for making future interactions with customers and prospects as personalized as possible.
The question now becomes how to actually leverage that data to create targetable audiences. After all, the people whose information you store in your CRM will have already expressed interest in your product or brand and consented to your use of their information, so having those addressable segments is likely to be highly effective (and valuable).
Many marketers target their CRM data by investing in a platform or vendor that’s separate from their advertising platform. They send their CRM data to the vendor, the vendor processes the data and sends it back to the adtech platform the marketer is using, and the platform then re-processes the data and provides targetable segments to the advertiser. But because there are so many steps and parties involved in this process, it often takes hours or even several days before advertisers can use those audiences to target.
Of course, many marketers will want (or even need) to use their first-party data more quickly. For example, airlines that collect first-party data when potential customers begin the checkout process need the ability to retarget users who abandon their carts before purchasing a ticket. Airline brands know that users are not likely to wait a week or more before deciding which flight and airline to go with, so waiting several days to receive targetable audience segments from a separate CRM platform could result in missed opportunities and lost revenue. And though it’s easy enough to retarget these groups today by using third-party cookies, that won’t be the case for much longer.
For those marketers who want or need to access and use their data more quickly, it makes sense to use a platform with built-in integrations that allow direct uploading of CRM data to streamline the process. By uploading CRM data directly into a platform, advertisers can access targetable audiences within hours instead of days. They’ll also enjoy the benefit of having a single source of support, which means one less platform to learn and one less vendor to include in billing systems and to account for when planning campaign budgets.
Just because someone tells you their name, email address, and location doesn’t mean you have a good understanding of who they really are. Likewise, just because you’ve collected some first-party data from your consumer base doesn’t mean you understand how to continue building strong relationships with them. For this reason, audience profiling is one of the most important ways advertisers can leverage first-party data.
Via strategic data partnerships and advertising automation, marketers can use first-party data as a starting point to create detailed user profiles informed by consumer demographics, interests, and buying behavior. Advertisers can then create more personalized marketing strategies based on these profiles. How does it work? We’ll use Basis’ integration with TransUnion Audience Platform (TAP) as an example here:
TAP’s audience pool, created from data points sourced from a combination of public, private, self-reported, and modeled data, covers 99% of the US population. When advertisers upload their first-party data into Basis, the platform can match that information to TAP’s vast data pool of consumers. Machine learning technology can then enhance that first-party data with more data points across categories like demographic, financial, automotive, employment, political, and purchases and interests. The result? In-depth consumer profiles that marketers can use to target and inform personalized messaging.
While audience profiling helps marketers better understand their current and past consumers, look-a-like modeling can help them tap into new audience pools. And while marketers can also leverage third- or second-party data for look-a-like modeling efforts, first-party data will provide the most accurate results. Let’s use Basis’ integration with TAP again as an example:
Once TAP has created those robust audience profiles with a brand’s first-party data, machine learning technology can identify other TAP-identified audiences that are similar to those consumer profiles. This addresses the concern of first-party scalability by creating large-scale audiences out of a smaller amount of first-party data. All marketers have to do is provide a seed audience via their CRM—or place a TAP pixel on their site, which will collect its own first-party data—and TAP’s machine learning technology can amplify it with additional audience pools.
Another powerful way to leverage your first-party data is to use it in tandem with contextual. Contextual targeting is having a moment, thanks to the fact that it’s especially privacy compliant, serving ads based on the content of digital environments instead of user IDs.
And while contextual is an effective strategy on its own, coupling it with first-party data can create an even more personalized consumer experience. How does it work? Let’s use Basis’ partnership with Peer39 as an example:
To leverage first-party contextual targeting in Basis, a brand can opt-in to automatically deliver campaign data like impressions, clicks, conversions, and media cost by URL to Peer39. Peer39 then analyzes the brand’s media distribution and performance across contextual signals, pulling insights about where audiences are spending time and consuming content. Based on those insights, Basis creates customized contextual targeting categories that are optimized to reach target audiences. By creating new categories with which to target, this technique expands the impact of a brand’s first-party data.
While privacy-compliant advertising hasn’t become the status quo quite yet, that's the direction our industry is hurtling towards. Come the loss of third-party cookies in Chrome, it will be critical to have robust methods in place for making the most of your first-party data—but marketers who start testing those methods now will gain a significant competitive advantage. Let the procrastinators come in third: early adopters are going for gold.
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First-party data isn’t the only tool advertisers need in their privacy toolkit. Check out Basis’ suite of privacy-friendly advertising solutions to see how we're giving our users a well-rounded set of solutions for privacy in digital advertising.