What’s Your Strategy for Thriving in a First-Party Data World?

Remember VHS and standard definition TV? Resolution was low and you could see each pixel that formed the picture. Today, HDTV makes pixels nearly indistinguishable and the picture quality almost as if the actors are in the room with you. For the customer-obsessed marketer, each pixel is a touch point, or piece of data, and, like a dot of light, is valuable. But only when put together to form the highest-quality picture of a consumer. HDTV combines art and science to create something engaging, and so does delivering customer-centric experiences.

It’s both a challenging and exciting time for marketers as we enter this new age of identity and addressability. On top of data accessibility changes from Google and Apple, marketers are also facing a number of challenges. An increase in customer engagement across a variety of channels has led to more fragmented data and a less-unified brand experience at a time when consumer expectations are climbing. Marketers must also juggle the necessity for a global presence adding complexity to finding identity and addressability solutions that can scale data strategies across every geography, while meeting requirements for digital transformation that are cross-screen and cross-channel.

Furthermore, first-party data has become more important than ever to provide the experiences consumers expect and welcome. Marketers need to better understand who these people (not devices) are and how they can be served beyond demographics.

Building a data strategy to address identity challenges

First-party data is an organization’s competitive advantage and differentiator. Why? Because it’s exclusive to its brand. But in order to take advantage, marketers need to have better control over their customer data so they can build strategies around it powered by identity.

This is also a good time to point out that most of the ecosystem right now is talking about identity when they really mean addressability—and that’s OK. Marketers should understand that addressability is a key piece of identity, however, identity goes beyond any specific identifier or digital channel. It encompasses understanding every interaction with a customer or prospect.

Consider all the ways your customer might interact with your business, like point-of-sale, web, customer service, billing, etc. Without a strong identity strategy to connect all the touch points, marketers will not be able to tap into the data they need to maximize their ROI.

Owning your data strategy allows for a single foundation on which marketers can build the view they need, and from which they can execute campaigns while maintaining consumer privacy. While first-party data empowers businesses to foster direct relationships with consumers and protect that relationship, it’s not always easy. Here are three challenges marketers face when building a comprehensive data strategy:

Fragmented views: Identity and identifiers appear in many different channels and formats, causing a fragmented view of the consumer and leading to the creation of inaccurate segments and imprecise measurement. Breaking down internal data silos is critical to reducing conflicts and creating a more complete, true view of consumers across an organization. 

Ecosystem latency: Data has to be translated through specific steps and parties before it can be activated, leading to risk, latency and drop off. This can be solved with the proper infrastructure to quickly leverage partner tools for persistence and speed when translating data between identity spaces.

Security and privacy: Ensuring data is used safely—and that data owners can maintain control while meeting privacy gold standards—requires consent-based and authentication mechanisms. Additionally, improved consumer transparency, use-case based knowledge, and appropriate controls over data movement and encryption are required.

Understanding the future of identity

As we look forward, marketers who are evaluating solutions to create their own identity assets should take these three fundamental components into consideration:

Record creation: Leverage interoperable solutions that complement existing technology investments and enable first-party identity as the base layer of the data foundation.

Needs: first-party data resolution to enable the creation of brand-owned customer views.

Record enrichment: Leverage collaboration and best-in-class third-party graphs and attributes to enhance your customer view and solidify customer intelligence.

Needs: flexibility to configure your own graph and enhance with second- and third-party insights.

Translation: A strong identity framework is like the Rosetta stone for your data. It allows seamless integration across your technology stack and any number of marketing activation and measurement partners.

Needs: translation that is fast, secure and interoperable across all channels where your customer is engaged.

Creating high-definition personalized experiences

Marketers are currently inundated with solutions for a post-cookie world, and they will wind up using more than one. There’s no silver bullet for the end of the cookie, diminishing IDFA or other common identifiers. For marketers who want to maximize reach and return, authenticated people-based buying is the gold standard of addressability and should remain at the very top of the tactic list. Authenticated audiences consist of individuals marketers have and want to foster a relationship with. It can be supplemented with cohort-based or contextual advertising for unauthenticated inventory.

A new Forrester Consulting Total Economic Impact (TEI) study, commissioned by LiveRamp, found advertisers who use LiveRamp’s solution in place of third-party cookies can achieve 343% ROI over three years, with payback within only six months of initial investment. Additionally, these businesses achieve:

  • $2.4 million in increased marketing budget efficiency
  • $1.4 million in incremental ROAS from people-based cookieless advertising
  • Nearly $1 million in cost avoidance and other savings

Just like VHS, third-party cookies will become a relic of the past. There’s no stopping the shift toward first-party audience data. While device-based targeting gets harder, there’s no denying that people-based messaging is better and more effective. The question is, how long will marketers hold onto the past knowing that a new age has already begun?