As part of The Drum’s Data Deep Dive, we look at how brands can protect themselves against looming third-party data crackdowns by cracking the first-party relationship.
Transparency and providing a valuable exchange with customers are key to incentivizing first-party opt-in, especially in an increasingly hostile data collection environment.
According to a cohort of industry insiders, marketers will build quality datasets when they are open with their customers about what they’ll gain by opting in.
“It’s advantageous to be direct,” says Margo Kahnrose, chief marketing officer of commerce intelligence platform Skai. The customer also needs to gain something and she advises brands to be “generous in terms of reciprocity”.
According to Kahnrose, customers are becoming increasingly willing to opt-in to gain a more tailored shopping experience and brand relationship.
Doug Hall, senior director of analytics at Media.Monks, says the gold standard for opt-in is to “treat privacy, trust and transparency” as the foundation of the relationship with the customer. “Don’t just be legal, be righteous – it will give you a competitive advantage,” he says.
Hall, whose firm counts Mondelez and Harley Davidson as clients, advises getting third-party legal counsel on how to gather consent on first-party data.
Industry experts are urging marketers to crack incentivized opt-in ahead of third-party crackdowns, including Google’s deprecate cookies and Apple’s rollout of its ATT data blocker feature.
“The walls of the walled garden are getting higher and higher, so brands can either choose to be disintermediated with their customers and rely on third-party data or choose to build a first-party relationship with their customers,” says Elliott Clayton, managing director of international sales at marketing agency Epsilon. “Brands won’t be able to secure themselves against the changes if they don’t get a grip of collecting and maintaining first-party data.”
Experiential & brand destinations
Christophe Castagnera, the head of strategy at experiential agency Imagination, claims that using activation experiences leads to opt-in rates “flying through the roof”.
“Experimental is an incredibly powerful lever to solve the problem of first-party data,” he says.
Imagination recently hosted an experience called ’Ford Go Faster’, offering driving experiences and gifting customers with a personalized video. Open rates for the emailed video were at 90%, had a 50% share rate and opt-in was at 50%.
“The opt-in rates are strong because people didn’t feel like what they were signing up to as spam, they opted in because of the experience they had and the emotional connection to the staff,” says Castagnera.
Castagnera advises personalizing incentives to increase the chances of quality data, as the customer wants that asset. He also says it’s better to ask customers at the end of an experience, so they don’t feel “hassled”. “Don’t push it, but make it obvious and build the opt-in it into the experience.”
Clayton calls for brands to establish an “ongoing value exchange to cement and deepen the customer relationship”. He says: “Without ongoing incentives after a customer has given you their details, most of the time you are just following up with spam.”
A loyalty program comes with inbuilt consent and is the best method of mining fresh data, according to Clayton. They are also “self-funding”, which is better than buying third-party data, he says.
While Clayton is seeing an uptake in loyalty programs in response to GDPR crackdowns in both B2C and D2C, Kahnrose advises brands to diversify beyond loyalty programs when collecting customer data. She references “savvy” D2C brand quizzes that create a “tailored shopping experience for customers while obtaining rich insights about them”.
Cosmetic brands have been effective in this space, with the likes of Fenty Beauty hosting a skin color quiz and Sephora running a similar skincare questionnaire.
A free sample or product can be an effective method of incentivizing opt-in – if done correctly. The perils of transactional incentives can lead to spam data and attract serial promotion hunters.
There are also warnings to luxury brands against offering freebies as it brings in people who can’t afford the product, leading to opt-out.
It’s often the least valuable incentives you can offer and still get the data you want, according to Clayton.
Freebies are often a volume tactic that don’t always assure quality. However, there are businesses that offer first-party data cleaning should an opt-in campaign come back with spam data. “There are big associated costs to getting a fake lead – it would be a risk to take on these leads without using one of those businesses,” says Clayton.