Data collaboration will be key to golden quarter success in 2023 - here's why
Over the course of the past decade, consumers have shown a tendency to start their end-of-year preparations and festive spending earlier and earlier in the year
However, as we approach this year’s golden quarter, brands are facing a variety of challenges, including a prolonged cost of living crisis which looks likely to dampen consumer spending. Combined with a heightened emphasis on consumer data privacy, those responsible for marketing brands are looking for new ways to engage consumers, measure their campaigns and optimize their budgets, especially as this may be the last festive period where third-party cookies will be in operation. Testing is critical to take learnings into 2024.
The rise of retail media
Fortunately, the emergence of identity capabilities to support a cookieless ecosystem, and unlock the value of first-party data, has led to the emergence of a whole new range of opportunities for brand marketers. The key to unlock these opportunities will be ‘data collaboration’ (i.e. bringing together data from external and internal data sources to unlock valuable consumer insights). Recent research by LiveRamp found that 94% of UK brand marketers are keen to collaborate with a partner to help enhance their first-party data strategies.
The recent boom in ad spending in retail media provides an excellent illustration of how data collaboration can work to the mutual advantage of brand advertisers, retailers and customers alike. Major retailers, particularly those with loyalty programs, have been quick to establish their own retail media networks, offering brand advertisers privacy-centric access to a consumer and purchase data and the opportunity to leverage that data (and combine it with the brand’s own) to design tailored offers and campaigns for consumers.
Our research found that 60% of UK brand marketers consider retail media an important part of their media plans this year. McKinsey likewise predicts that retail media networks could amount to $100bn in ad spending in the US by 2026. With spending on retail media leading the way, it’s likely that this golden quarter will help cement a new era of stronger data collaboration between brand marketers and a variety of external partners.
Data in demand
With uncertainty clouding the economic outlook, it’s critical that marketers invest in marketing strategies that produce measurable business outcomes and benefit the bottom line. If your business isn’t already exploring the potential of data collaboration, you risk falling behind your competitors.
Getting their own first-party consumer data in shape is an excellent first step for brands beginning their data collaboration journey, as was the case for retailer Boots. Improving access to fragmented data internally should be considered an absolute priority, as a significant portion of potential digital revenue can be blocked by data silos inside an organization. By uniting these data silos, marketers are able to remove inconsistencies and achieve a deeper, more rounded understanding of consumers. This process can also lead to new efficiencies within a brand’s tech stack and help to optimize targeting and marketing strategies.
However, no matter how much data you have internally, it’s impossible to have an end-to-end picture of the consumer by yourself. With scale being one of the biggest challenges facing advertisers in the inevitable rapidly progressing ‘cookieless’ era, brands need to collaborate with multiple partners in order to have access to a meaningful amount of data and enable addressability. The brands who will win big this quarter will be those who have a plethora of partners and are collaborating via data clean rooms to scale-up their addressable audiences.
Within the field of data collaboration, enhanced data clean rooms are a vital tech solution that can ensure this addressable data is accessible across the business and, crucially, can be made available in a privacy-conscious way. They are also the key tool in enabling collaboration with parties outside of the business.
Collaborate for success
While retailers have been among the first to move on the opportunities presented by data collaboration, other businesses with large stores of customer data, such as financial services companies and membership organisations, are now exploring the potential of establishing their own commerce media networks.
There are numerous benefits to brands collaborating with a retail or commerce media network. Through the data collaboration that underpins them, brands can complete the measurement loop and better gauge the effectiveness of their ad campaigns at a time when the return on ad spend (ROAS) is under immense scrutiny.
This is still a developing field. The industry has only yet scratched the surface of what’s possible in consumer, product, and partner innovation through the use of data collaboration. However, it is already clear that brands looking to make a big splash in this coming golden quarter need to use the next few months effectively and prepare their businesses to harness the potential of new data partnerships.