When Google announced its plans to kill the cookie last year, it was a moment of reckoning for advertisers given that they would no longer be able to depend on third-party data and vendors collecting the same in order to gain customer insights and target the most likely cohorts.
With data privacy expected to dominate conversations around tech in 2023, as India follows the lead of the European Union and other western markets in instituting rigorous constraints on how companies collect data and ending reliance on third-party data, agencies are focusing on creating specialized solutions, such as gathering first-party data, to deal with the same.
Amit Singh, Director – Planning, Carat India, says there are several challenges that brands must overcome to create a rich first-party database for improved contextual targeting. “Brands must be able to use the data to personalize the customer journey and improve targeting; this requires good analytical capabilities, the right technology, and data science teams to make use of their data effectively,” he says.
He adds that advertisers have several solutions to create tailor-made advertising for customers and receive better ROI on ad spend, even as concerns over privacy increase.
Some of these solutions include lookalike modelling (advertisers can use lookalike modelling to target users who are similar to their existing customers, without the need to collect additional personal information); privacy-compliant data sharing; pseudonymisation (in which advertisers can use techniques such as data hashing or tokenization to pseudonym personal identifiable information (PII) to enable data sharing while maintaining privacy; consent management; data governance; Collaboration with publishers; and transparent data-usage policies.
Shweta Bhalla, Media Director at Blink Digital, observes that currently, brands are collecting first-party data from multiple sources – user base info, web analytics, digital campaigns, consumer surveys – but usually all the data is fragmented and doesn’t talk to each other.
“The biggest challenge I see is data integration at an organization level while addressing privacy and security concerns,” she says, noting that brands with their own DTC channels and app environments are collecting data on customers’ behaviour and preferences, such as usage patterns, location data, and demographic information which can then be integrated with other first-party data to create a comprehensive view of the customer.
And of course, email and Whatsapp marketing are also being extensively used to increase consumer interaction moments and have been shown to drive higher ROI.
With walled gardens and regulatory changes reducing available third-party data signals and driving new privacy requirements, first-party deterministic data has never been more valuable for advertisers. Advertisers need to start developing their first-party data strategies into ‘always on’ tactics. Tejinder Gill, General Manager, The Trade Desk India, notes that the internet is shifting toward authentication as other available signals deprecate and brands not preparing and engaging today will start to feel left behind very soon.
“Every marketer faces two key challenges when it comes to building first-party data – ‘getting started’ and ‘taking the next step.’ To help understand the market opportunities and overcome challenges faced by brands, we created practical resources for marketers who can embark on their first-party data journey,” says Gill.
According to Shayakh Mirza, Vice President, Digital Planning, PHD Media, for brands, data management will be a vital challenge to overcome – especially where offline intervention is operationally high, and data collection remains either a challenge or is in silos.
“Smart investments in technology and unifying data sets with a trusted enterprise data source – accessible across the organization can help overcome these hurdles. The post-COVID era is a clear sign to these times, as we’ve seen numerous brands and advertisers leveraging technology to drive digital transformation and implement seamless data collection,” he says.
Mirza adds that having the right partner, technology, processes, and people with the capacity to handle and harness the true potential of first-party data will be the differentiating factor between effective and ineffective advertising for agencies and the brands they cater to.
The Trade Desk has also just announced the launch of Galileo, a new approach for advertiser first-party data activation. Advertisers are increasingly looking to activate their valuable customer data as safely as possible to optimize media buys across all digital media, while accurately measuring results and business outcomes.
“The tool includes a comprehensive self-assessment tool to appraise the readiness of a brand’s first-party data and determine the next steps for the organization; and a practical 8-step roadmap to guide marketers to kick-start their first-party data program – from defining objectives to acquiring and activating first-party data, and enhancing long term strategy,” elaborates Gill.
Chetan Asher, Co-founder and CEO, Tonic Worldwide, observes that creating a first-party database is like putting together a jigsaw puzzle. “Brands must find all the pieces from many different sources and then fit them together to get the full picture. Collecting data from different sources is just the first piece, and brands need to balance multiple pieces to create a robust first-party database.”
“Many major brands spend years building strong relationships with their loyal customers, generating unique and valuable insights regarding their target audiences. Galileo can enable brands to unlock that data in a privacy-conscious manner to find new customers that share similar characteristics. Galileo works in concert with new cross-channel identity solutions, including Unified ID 2.0,” says Gill.
Kavita Shenoy, CEO and Founder, Voiro, says that brands must focus on getting organized about collecting first-party data because it is not a trivial exercise because it requires all customer touchpoints to fold in data into an accessible location. A recent whitepaper was written by Voiro on ‘Top 5 Trends To Drive Revenue in 2023’ identified data privacy and consumer protection as one of the key marketing trends for the new year.
“Advertisers should partner with publishers that allow them to interact and collaborate with audiences without revealing each other’s underlying data set. Clean rooms will be the buzzword for the AdTech ecosystem over the next couple of years and will be an essential part of ad targeting as regulation becomes more stringent,” observes Shenoy.
“But data without quality and relevance is not going anywhere. Hence brands biggest challenge will be to constantly evaluate the data that they are collecting is qualitative and relevant for their target market. And in the absence of a clear roadmap of how to deploy and use this data, the process will be bigger,” says Asher, adding, “With robust first-party data, brands can design a full-funnel engagement communicating with consumers at every stage of their journey. First-party data allows one to have multiple opportunities that hyper-personalization offers. Hyper personalization can be an effective approach to maximize the effectiveness and achieve high ROI.”
All said and done, in conclusion, any sustainable first-party data strategy cannot be developed by simply circumventing the privacy conundrum with tech-based solutions. Mirza says that while there is no doubt that the need of the hour to invest in the right technical measures, a rigorous marketing strategy is one that places customer relationships at its core and has a strong human focus.
He asserts, “Brands that hold consumer sentiments at the heart of their strategy and are open to experimenting and learning with new ways of harnessing data and adapting to emerging ways of targeting are primed to win in a privacy-first world.”