It’s not how much data you have, it’s what you do with it that counts
Will the impending demise of the third-party cookie create an entirely new digital divide? Will the growing emphasis on first-party data mean success for brands that have a direct customer relationship and failure for those that sell through middlemen?
This issue is at the heart of the session Does the Future Belong to the Data-rich? at The Drum’s Digital Summit, presented in association with LiveRamp. The conclusion reached by panelists Belle Cartwright, head of data solutions at MediaCom, Phil Jackson, global digital analytics lead - business insights and analytics at GSK, and Hugh Stevens, head of strategic growth at LiveRamp, is that it’s not how much or how little data a business has that matters, it is how you use it to create value for your customers and you that counts.
Bring your people with you on the journey and build data partnership
“No brand or advertiser should consider themselves data-poor,” Jackson said. “It’s always relative to the business outcomes and challenges you have, and what data you need to own and hold, and can leverage.”
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Same journey, different starting points
As Cartwright pointed out, every brand is on the same transformation journey, rethinking how it approaches its digital marketing in a post-third-party cookie, privacy-first world. But they’re all starting from different places.
“Retailers, for example, might have tonnes of data, but they don’t always know what to do with it or where to start or how to plug it into an activation play,” she said. “You might have all this loyalty data, but you can’t actually get it into media for activation purposes, because you don’t have a clear audience strategy for what you’re trying to achieve.”
The other key points of the session were:
Start from your business objectives – what are you trying to achieve, and what data do you need to achieve it? There’s a cost to acquiring data, in both people and technology, so you need to understand the overall value of what you’re doing, and balance the investment needed with the return back to the business.
Bring your people with you on the journey – change is difficult, so internal communication is vital. Some people will need to understand what you’re doing and why. Others will just need to know you’re “on it”.
Test and learn – not everything will work for every business, so you need a framework to test the different options – first-party data, contextual targeting, cohorts, data partnerships, etc. In addition, the amount of inventory addressable via first-party data is small, so prices are likely to go up. That means being aware of alternatives, as well as putting pressure on the quality of your creative and how well you understand the various channels you use.
Think more broadly about the data you own – you might not be able to collect data directly from your customers, but your supply chain could be another source of first party data giving you a proxy for what’s selling and what’s not. As Cartwright says: “We need to become smarter in the way we define what data is usable to understand advertising effectiveness, and to understand our customers better. Even companies that we think of as data-poor could be incredibly data-rich when you add in all of their non-customer-based data.”
Build data partnerships – LiveRamp’s Stevens gave the example of French retailer Carrefour launching a program to collaborate with CPG brands. The result should be a win for everyone: the brands get rich transactional data to help them understand their customers better; the retailer sells more of the brands’ products; and customers get more informed marketing and, ultimately, better products.
Start now – if you’re not already on the journey, or you’re only just starting, Google’s decision to delay the degradation of third-party cookies in Chrome has created a great opportunity to catch up.
“When Google made that announcement, we saw a sigh of relief,” Stevens said. “But actually, it’s an opportunity to get testing and move forward with your strategy. It’s a chance to think about how data – whether it’s from customers, or from partnerships – is going to be valuable moving forward. Now’s the time to think about focusing that 10% of your spend that goes on the ‘out there’ stuff on what’s going to be the future.”
To watch the session ‘Does the future belong to the data-rich?’ in full, click here.
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