Marketers: use first party data or die

By Kevin Joyner, Director of Data Strategy



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May 14, 2020 | 4 min read

Everyone’s been saying it: customer data platforms, advertising and publisher data platforms, agencies. First-party data is now very important in digital marketing.

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Lotame says first-party data is “the most valuable [type of data...] first party data is king.” Segment says it is detailed, accurate, respectful and a unique asset. Sovrn says, “advertisers have a countdown clock [for] when those transitions to first-party data need to be complete.” Sir Martin Sorrell says, 2020 is “the year of first party data.”

I’m going to explain why it’s so important, and - since it’s what I know - I’m focusing on marketers and their agencies.

Digital advertising as we knew it

Here’s how things used to work for marketers:

You invested money in digital advertising.

Your investment was transformed into ads that were managed with the basic tools in a platform, e.g. Google AdWords (as it was known).

Your agency made the difference by being good at managing the ads. Sometimes they used premium management tools. The main thing was their campaign management skills and knowledge. They knew how to use the ad platforms better than other agencies, and better than you.

Your advertising relied on solid third-party data. Your agency applied it in targeting, and it was the basis of measurement. Effective optimisation was based on it, totally.

And so ultimately, you and your agency were able to produce competitive performance.

Here’s how things will go now and in the future, for marketers and agencies that don’t change:

There’s less money to invest because performance is failing (see below).

Standard platform tools are much more advanced, and they are as available to competitors as they are to you. They are artificially intelligent, and increasingly they’re automating campaign management.

The old-fashioned agency’s efforts are ineffective. Their campaign knowledge and skills are increasingly insignificant as the platform tech does more and more of the work. They can’t make a competitive difference.

You’re using third-party data, but it’s flawed. Both the targeting and measurement are fuzzy. Your advertising is less efficient and your optimisations less effective.

As a result, performance is increasingly uncompetitive. Your business grows less, and loses market share.

And here’s why first-party data is so important

You invest money in digital advertising, but also the availability of first-party data

You use the same advanced platform tools as your competitors…

… and the agency activates your first-party data. It’s unique to your business, and the application can be bespoke, so it’s your competitive edge. It’s integrated with the ad platforms and used in machine learning models. You have a good basis for targeting (and an improved one for look-alike prospecting). You’re able to make customer behaviour and lifetime value predictions and use them in bidding and optimisation.

The agency is much more focused on data solutions and customer experience. They study competitors, market audiences, your customers, customer segments, creative & messaging, your business’s marketing funnel and the nature of ongoing customer value. Media budgets and multi-moment user journeys are planned across channels, not within channels.

Third-party data is a commodity, but still a useful tool. It’s used in combination with first-party audiences, and it makes a contribution to measurement.

Your measurement and insight methods are diverse and innovative. Digital Attribution (which relies on personal data and cookies) is increasingly ropey, so you supplement it with regular controlled split-testing and econometrics. Your focus has shifted towards the long-term value of acquisitions, and away from the precision of conversion attribution.

Ultimately, you and your agency will deliver competitive performance. Your business grows more (not less).

That’s what we’re all talking about. Hopefully it’s clear now.

Kevin Joyner, director of strategy & planning, Croud


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Croud is a global, full-service digital agency that helps businesses drive sustainable growth in the new world of marketing. With a rich heritage in performance,...

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