Make First-Party Data the Foundation of Your Digital Strategy
Data & Analytics
Nov 09 2022
While Google’s recently-announced extension of third-party cookies into 2024 gives marketers some extra breathing room, first-party data will undoubtedly shape the future of digital advertising. Campaigns focused on first-party data utilization have already proven an effective means of locating target audiences online with impactful messaging — so long as brands can incentivize would-be customers to buy in.
The challenges facing first-party data strategies are twofold: first, brands must employ methods of gathering user data that create a positive customer experience (read: no spamming) and without interfering with shifting privacy regulations. Second, every business must determine how this data can be used to pursue new opportunities within its target audience. This can be challenging: research firm Gartner estimates 63% of marketers struggle to apply their own customer data to improve personalized ad experiences.
Here’s why first-party data is at the center of the ecommerce landscape for years to come, and a few tips on how to build an effective campaign around this increasingly valuable commodity.
Users Expect Brands To Identify Specific Needs
First-party data goes hand-in-hand with the timely, relevant ads your customers are most likely to find helpful and actionable. Salesforce data shows 70% of users are influenced by a company’s understanding of their personal needs, and consumers have come to expect brands to adjust content (ie. dynamic retargeting) to suit their specific tastes.
Ecommerce brands hoping to retain or grow their market share will soon need to develop campaigns capable of generating first-party insights, built to keep pace with rising customer expectations and privacy rules making it more challenging to track individual customer behavior. The good news is plenty of businesses are presently setting a blueprint for effective first-party data gathering and utilization: online survey data, direct customer feedback via social and other means, account creation, and activity when logged in are all potential sources of permissible first-party info. Plus, being transparent about company data tracking and usage from the jump is generally a positive thing in the eyes of your customers.
Acquiring and Leveraging First-Party Data
So, how is it done? According to research from May 2020, digital brands using first-party data as the foundation of their digital ad strategy achieved up to a 2.9x rise in revenue and saved up to 1.5x in costs, with 56% of the same respondents expressing they currently feel below-average or average at utilizing their data. The past two years of booming ecommerce and increased privacy-consciousness sets the stage for even greater advantages to brands capable of leveraging first-party data to its fullest potential.
Building successful campaigns on a foundation of first-party user data means forging a bond with your brand’s online shoppers strong enough that they “opt-in” when it comes time to allow data tracking — whether that means signing into your website with personalized login credentials or allowing cookie tracking through their web browser. Perfecting the customer experience and your brand’s digital presence for the purpose of acquiring useful data can be done several ways:
Learn to Love Native Ads. Did you know 70% of consumers prefer learning about products or services through native content rather than traditional advertising? If you’re looking to simultaneously do some product storytelling while reeling in new and interested users with an awareness campaign, native ads can successfully expand your reach and score your brand some early likability points.
Embrace In-App Advertising. The nice thing about virtually everyone carrying their own mobile device is they are highly personalized (most families don’t split ownership of one single iPhone). That makes in-app environments and data gathered from their respective download policy agreements an extremely reliable source of user interests and preferences.
Spec it Out. We’ve covered this point before, but it bears repeating: your ads perform best when aligned with the ideal creative specifications for each channel, particularly in the case of video ads. Video content is proven to be 10x more effective at earning Twitter engagements compared to text-only tweets; increases shareability of LinkedIn content by 20x; makes Pinterest users 2.6x more likely to convert; and routinely crushes every other content type on Instagram.
We’ve saved cross-device ID targeting for last, as it is slightly more technical compared to the points above because it requires some third-party assistance from platforms like The Trade Desk. Though it takes some extra legwork to implement, the ability to track customer interactions with your branded materials across devices and social channels will highlight where your ads are carrying the most impact — and which channels may be relatively inefficient uses of your marketing budget.
Innovative uses for first-party data are sure to emerge in the months and years ahead as advertisers mastermind how best to present their brands to growing numbers of eager digital shoppers. In the meantime, implementing these simple strategies now will aid in campaign optimization, ad personalization, and safeguarding your marketing efforts against unpredictable changes in data privacy regulations.
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