Top 3 trends in digital marketing mean new uses for transactional data
With digital ID deprecation underway, Acxiom’s Eugene Becker, general manager and executive vice president of global data and identity, discusses how transactional data should be part of the solution
2022 is set to be the last full year of digital IDs like third-party cookies and mobile ad IDs (MAIDs) before Google and Apple banish them from browser and mobile operating systems. So, it’s out with the old and in with the new — but what will that “new” look like? The more I look at the changing adtech landscape and think about what’s going to help brands fill the cookie-shaped hole in their marketing, the more I see the growing importance of transactional data.
Changes are spurring brands to look for alternative ways to connect with the customers they love, but there’s no single, one-for-one replacement. Brands who want to continue reaching relevant audiences need to develop a range of mitigation strategies to keep and build on the progress they’ve made in addressable communication.
These include a shift toward:
- IDs based on real people vs. IDs based on digital IDs like cookies.
- The management of people-based IDs and associated data on platforms purpose-built for this new reality.
- A drive for brands to get more strategic with their use of data, given it's likely they’ll have less audience data to play with in future.
For me, these three trends define the new reality facing brands today, and they highlight the growing relevance, power, and untapped potential of transactional data.
What is transactional data exactly?
Transactional data is what it sounds like: data about customer transactions. Information about the who, what, where, how (and how much) of purchases or other relevant transactions.
You might be thinking, “Don't brands already have transactional data?” Yes. Every business has data about how their customers are buying from them, but this first-party transactional data will only tell you so much (assuming you're able to manage and use your own transactional data effectively, for starters).
It won't tell you about the transactions your customers are making with your direct competitors. Or even about transactions happening in other categories that can provide you with insights to inform your next marketing move.
The transactional data we’re going to see more of in 2022 is ‘big data’ from third parties, often industry-specific providers, that helps fill those gaps. It will be privacy safe data about what’s on people’s grocery lists, which models of car they’re buying, and how much they spend on streaming entertainment services.
Let’s explore the three trends I mentioned above.
Trend 1: Brands need an alternative to digital data
Digital IDs, like cookies, have been foundational in adtech for years, and instrumental in helping brands communicate with their customers. Huge investments have been made and hundreds of businesses have been built on that foundation. But as digital IDs deprecate, brands are starting to ask the question “What’s going to come next?”
Change is inevitable, and we’ve already seen adtech shift investment to categories like Customer Data Platforms (CDPs) and clean rooms, which are built around connecting data about real people in order to reach real people.
When I speak to marketers, it’s clear they’re not going to give up on a decade of best practices in audience buying. Instead, they’re going to shift to new types of data. This data is going to be people-based, and I believe transactional data is best placed to serve as the alternative.
Trend 2: People-based transformation is happening across the whole ecosystem
Along with the shift to people-based data, brands will need to focus on new ways of actually moving this data across the ecosystem. The shift to people-based platforms is already evident: Adobe and Salesforce are in the process of deprecating DMPs and focusing on CDPs.
When it comes to data marketplaces, the focus is shifting from Oracle Data Cloud and Nielsen Marketing Cloud which are based on digital IDs, to Amazon Data Exchange and Snowflake Data Marketplace which more readily accommodate people-based data.
All of this represents a shift closer to the enterprise. These systems already exist as part of marketers’ enterprise tech stacks, and I believe this platform trend will help marketers to navigate the shift in IDs.
In addition to the shift to people-based platforms, we’ll see new ways of conveying data across the ecosystem. It’ll be out with the old, as brands no longer rely on cookie syncs – and in with the new, in the form of new IDs like UID2.0, clean rooms, and people-based integrations.
This adds up to a massive disruption to the ecosystem, and odds are that audience buying won’t operate on the same scale it used to. On the other hand, people-based connections will be extremely precise, and the fidelity of people-based data, like transactional data, is going to revolutionize audience reach as well as measurement - welcome news for brands who don’t want to waste all the investments they’ve already made in audience data.
Trend 3: The new potential for strategic data use
Transactional data is not new, but brands have not yet tapped its full potential. While generic audiences are widely used for reach, brands are just starting to use transactional data for strategic planning.
Insights are being left on the table as transactional data can tell you about total category spend, competitive loyalty, consumption channels, and more.
Say you’re a coffee brand. You can get data on overall category spend and individual brand spend. When you combine the two, you get insight into your share of wallet versus your competitor coffee brands. You can make better informed decisions about not just where to reach customers, but which messages and strategies will work best.
If you’re a retailer and you can identify someone with a high spend in your category, and you also know they only shop online, then you’ll want to serve them digital only promotions like a 10% discount on their next online order. You’ll know which customers you can reach by running your ad on social, web, and CTV – and you can save the dollars you might have wasted on print and traditional TV spend.
These are just basic examples – strategic marketers will already be imagining the possibilities that open up when they get access to the best transactional data in their own vertical, whether it’s automotive, CPG, retail, financial services, or healthcare. Long story short, effective communications have multiple moving parts, relying on segmentation, market sizing, message, and creative – and transactional data can inform them all at the strategic planning level.
Preparing for digital ID deprecation before it happens
We’re already a few months into 2022, and it’s time we all recognize that there’s no single solution to the challenge of deprecated digital IDs. Rather, I see a mix of trends gathering momentum: the shift to people-based data and to people-based platforms and connections, and the need for brands to get strategic with the data that will remain at their disposal.
Transactional data sets and marketplaces that aggregate the best transactional data from various industry verticals are going to be hugely powerful assets for brands who tap into their potential to make marketing better – sooner rather than later.