Marketers use a wide variety of data to inform their marketing strategies. Some of the data contains great value but it can also be unreliable. Now brands can use each other’s data to deliver better marketing campaigns. But how can this be done safely?
In the third episode of Everything You Need to Know (EYNTK) about data and customer experience, Jed Mole, European marketing director at Acxiom explains the differences between different types of data and how brands can benefit from each other’s data resources in privacy-compliant ways.
Traditionally marketers have relied on first-party data to inform their marketing campaigns and marketers still see it as useful insight into their customers' lives. Research by Econsultancy last year shows that marketers felt first-party data drove the highest increase in customer value. But first-party data while valuable, has its limitations.
In the video, Mole argues that not all data is equal and there is a better way for brands to monetize on their data in secure ways. He introduces ‘safe haven’ technology where brands can put their de-identified data through a trusted third-party’s ‘black box’ for a mutually beneficial data-sharing relationship.
“It’s the trusted third-party that allows each brand to benefit from the combined insights of their data without ever having access or seeing each other’s data,” says Mole.
Catch up on last week’s episode which examined the customer recognition gap. Next week’s episode will tackle the new customer view.
Welcome to Everything You Need to Know: About Data & The Customer Experience.
Today we are going to be talking about activating data in the new data economy. So what do we mean by it? Let’s start with the new data economy. There’s more data than ever before and it’s coming at us from a rich and varied range of sources.
And then activating the data. How do we identify the data we need? How do you harness it and put it to use in privacy compliant and commercially attractive ways.
Data comes in three primary forms. First, second and third party.
First party data is incredibly powerful and important. It’s transactional and behavioural data is collected across all your touch points.
Third-party data is collected and curated online and offline by companies to provide to other companies, in particular brands.
Third-party data typically includes lifestyle, demographic and behavioural data that can turn a black and white, one-dimensional image into something 3D and in full-colour. That can provide the context and relevance to drive better customer experience.
A lot has changed in the past decade when it comes to third-party but it’s still relevant and powerful.
The newcomer to the party is second-party data. This is another brand using your first-party data. Combing the data to deliver smarter insights and a better customer experience.
All these changes represent a new data economy as brands recognise the power and potential of their data to deliver improved marketing for others.
But it requires an open system to do this. One that can deliver recognition, enhancement, validation, governance, billing, packaging, distribution and so on.
So how do you turn your first party data into second party data?
How might a manufacturer of outdoor wear make its data available to a manufacturer of off-road vehicles?
There’s one way we are seeing increasingly used and that’s safe haven technology. That’s when two brands or more can pull together their data in de-identified privacy-safe ways into something you might think is a black box.
But it’s the trusted third-party that allows each brand to benefit from the combined insights of their data without ever having access or seeing each other’s data.
Let me give an example. A major FS company working with another brand, a premium publisher, achieved exactly the same acquisition results by targeting just one-eighth of the audience.
The marketing was so much more relevant and better for those who wanted the offer, and better for those who didn’t want to see the ad in the first place.
The new data economy is changing the way brands have to think and act today. An automotive client of ours told us on average 15 to 20 years ago, the number of times someone would visit a showroom before they purchased was about six. Today, that is down to about 1.6 showroom visits.
When people visit dealerships, they give off signals and its intent data. When you ask, does it come in this colour? How much will you give me for my car? What are the credit terms? This is intent data. It’s very powerful. So do brands simply throw their hands in the air and say, ‘We will take our chances when the customer walks in of the street’, or do they reach out into the digital eco-system and identify the data the customer is generating on their customer journey and try and influence them to deliver a better CX experience.
Of course it’s the latter. It’s very difficult but also very possible. When humanising data It’s important to be aware of the risk of false positives.
Take the classic example of when someone buys a gift for a two-month-old niece or nephew and then receives a constant stream of similar offers. Even though the data exists, to suggest that they have grown up children, that this is an ad-hoc process at best, and there are probably far more of them than us.
Unfortunately, and recently, a colleague of mine proved this bad example is still alive and well today.
The data is there to tell a story, the challenge is harnessing it in privacy compliant ways and I hope you join us next time when we talk about how we do that with the new single customer view.
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