How advertisers can leverage the power of first-party data
With third-party tracking cookies on the way out, the use of first-party data is now imperative for successful digital marketing. In fact, third-party cookies have been a dissatisfactory approach for some time. The privacy concerns of tracking people online aside, they’re just not that effective. It’s estimated that 26% of digital advertising budgets are wasted on the wrong audiences and strategies and that third-party tracking cookies often only achieve match rates of between 40% and 60%.
With third-party cookies now expected to be withdrawn by next year, and Mobile Advertising IDs already severely depreciated, brands and agencies urgently need new data strategies to achieve the holy grail of personalised content. This is where a strong first-party data strategy comes into play.
What is first-party data
First-party data is information that companies have collected from customers, with their consent, and which the company owns. Types of first-party data include information from POS terminals, data held in CRM systems, digital interactions, purchase history, customer behaviour, and much else besides. When it comes to advertising, key first-party data for brands and agencies include information on what interests individuals visiting the brand’s website or mobile app, and the actions that users take when on these properties, as this data can provide an insight into that individuals’ preferences and purchase intent, which can then be used to provide more relevant online experiences.
First-party data vs. third-party data
Third-party data, on the other hand, is data that brands and agencies purchase from partner organisations that have aggregated signals from across the web to create audience segments. On paper, this data helps brands and agencies to better target the audiences they want to reach, but as mentioned above, in reality the accuracy of both the data and the match rates often leaves something to be desired.
Despite their inaccuracy, third-party tracking cookies and MAIDs have until now been the most important source of third-party data for brands and agencies. However, global privacy regulations and changing customer perceptions mean that third-party tracking cookies and MAIDs will not be available for much longer. Brands and agencies are therefore having to come up with new first-party data strategies to make up for the impending loss of audience data.
Developing a first-party data strategy
As advertisers build first-party data advertising strategies, it is important that they source and use their own customer data in a privacy-first way and partner with other first-party data providers that use a privacy-first approach for data collection and handling Telco-verified IDs, such as Novatiq’s Zenith ID.
Zenith, part of Novatiq’s Fusion platform, has been engineered for privacy. The Zenith ID is generated by brands and their publisher partners on their websites and mobile apps and verified by telcos – the latter using their own first-party intelligence. The ID ensures the consistent recognition of the same user across devices for consented first-party profiling. Using the ID, brands and agencies can verify both authenticated and anonymous web users, which allows them to deliver personalised advertising with scale and reach.
As the enabler of a first-party data strategy, the Zenith ID has a further benefit in that it enables marketers at brands and agencies to more accurately re-engage users for a better return on investment (ROI). This is because the 360-degree profile of users that can be established through the ID can be applied to deliver the most appealing services and messaging when the user is on a brand’s websites or apps. This dialogue can then be maintained continuously as users visit other sites and apps in order to bring them back into the branded environment.
The benefits of this approach are clear, from keeping users engaged with the brand and increasing conversion rates to improving campaign ROI through decreased cost per action.
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The age of first-party data marketing
The time when brands and agencies relied on undifferentiated third-party data for programmatic advertising is over. The future lies in highly differentiated approaches based on well curated and safely activated first-party data. The key now is to choose the right ID infrastructure on which to build a first-party data strategy, and the right partners to build an effective approach to personalised marketing.