Billy Loizou, Area VP, APAC, Amperity explains how to build a sturdy foundation of first-party data during the generational shift we are experiencing today.
The world of marketing is undergoing a profound transformation, driven by two major forces: the deprecation of third-party cookies and the ever-evolving landscape of data privacy. In this generational shift, marketers can no longer rely on the traditional methods of identifying, retaining and acquiring customers. Instead, they must act fast and build a sturdy foundation of first-party data to ensure they continue to deliver ROI on every paid campaign.
In fact, Boston Consulting Group (BCG) uncovered a consistent theme in its APAC first-party data study: digitally mature brands are increasingly using first-party data to drive meaningful, privacy-safe interactions with their consumers. Even more, they’re noticing real business results.
This sweeping generational shift happening across marketing has been a brutal revelation for brands and agencies. Not only are consumers increasingly dissatisfied with the creepy factor of targeted ads, but they’re also opting out of third-party tracking.
And brands that have been “renting” customer data from third-party data sources and then relying on external digital identity graphs to match their data with ad platforms are no longer preferred as data privacy laws and customer preferences evolve.
If that wasn’t enough, browser restrictions on cookies and mobile ad IDs (MAIDs) and privacy-first browsers are growing and affecting identity-focused marketing. And the walled gardens of Amazon, Google, Facebook and major retailers are making it challenging to take data out for use elsewhere, inhibiting cross-channel planning, buying and optimisation.
The paid media pinch
The bottom line is, access to data is stratified. The connective tissue of customer identity woven together from third-party sources is becoming weaker as identities become shallower, duplicated and splintered.
The status quo ways of digital marketing are no longer working the way they used to. And CMOs are feeling the paid media pinch.
Let’s break it down:
1. Data deprecation threatens nearly every form of online behavioural advertising: The third-party data that the ad ecosystem was built on is collapsing. The only reliable data left for marketers to base their strategy on is their own first-party data and publisher’s data, sourced directly or via second-party marketplaces.
2. The media buying ecosystem is being completely reset: Even as effectiveness goes down, costs are still high. The bidding language DMPs/DSPs/ad servers use to communicate in real-time with each other is broken over concerns about customer data leakage.
3. Identity resolution across channels is increasingly difficult: It’s a consequence of the deterioration of third-party data and MAIDs, and it results in far lower match rates when trying to acquire new customers.
Sure, paid media channels like Google Ads, Facebook Ads, etc. can effectively reach current and prospective customers. However, the most effective way to use these channels going forward is with first-party data, which results in higher match rates and future-proofing benefits. Your existing customer data allows you to target consumers with relevant content that will increase organic interaction and make them less likely to view the ads as spam. Win win.
It’s evident that a paradigm shift is necessary to break free from the constraints of the old and embrace innovative strategies that resonate with today’s consumers. Failure to adapt to this new reality risks continued underperformance and a widening gap between marketing efforts and business goals.
Moving to a first-party data strategy
Digital marketers are moving away from inferring behaviours, context and intent through invasive and questionable tracking mechanisms. Instead, they’re deploying ‘privacy by design’ within a first-party data strategy to make sure that data collection is consensual and usage transparent.
To gather valuable insights, they are implementing tactics that encourage customers to willingly share their data in exchange for meaningful perks or benefits. Whether it’s a captivating offer, exclusive content or a personalised recommendation, these compelling calls-to-action (CTAs)
inspire action and drive engagement. By embracing the power of first-party data and steering clear of questionable practices, digital marketers can proactively build a foundation of trust and deliver exceptional experiences that turn anonymous visitors into known, loyal customers – an approach far superior than attempting to find loopholes around cookies with different third-party solutions.
Moreover, digital marketers are exploring alternative digital media buying modalities to navigate the changing landscape. Connected TV and streaming platforms offer new avenues to engage with audiences whilst adhering to privacy standards. By embracing these emerging channels, they can deliver targeted messages to consumers in a privacy-safe environment.
In addition, alternative targeting approaches, such as contextual targeting and leveraging publishers’ data are gaining momentum. Rather than relying solely on individual user profiles, marketers are tapping into the contextual relevance of content and the aggregated insights provided by publishers. This approach enables them to reach their desired audiences effectively whilst respecting privacy boundaries.
Identity resolution: the game-changer
As marketers tap into the contextual relevance of content and leverage publishers’ data, the need to connect the dots and create a unified view of customers becomes paramount. This is where identity resolution comes in. It acts as the missing puzzle piece, allowing them to stitch together fragmented data points, eliminate duplications and gain a holistic understanding of their target audiences. And it’s key to building a successful first-party data strategy.
However, very few providers can actually muster the technical capabilities, legal compliance and financial resources to deal with data deprecation. Whilst an abundance of data may seem promising, critical questions arise: Is it accurate? Is it clean? Is it comprehensive?
Amidst this uncertainty, one critical provider capability emerges as a game-changer – a unified customer profile. Acting like the brain and memory of the modern digital marketer, a unified customer profile holds immense value. It merges identified first-party data into one coherent source of truth that reflects all customer online/offline touchpoints and interactions with a brand, both current and historical. This is especially crucial for larger retailers whose majority of transactions still happen offline or in stores.
With a unified customer profile, marketers can:
● Gain a complete and accurate understanding of customer behaviours, preferences and needs
● Develop increasingly personalised and relevant marketing strategies that enhance customer experiences and build relationships, which boost lifetime value
● Mitigate risks, costs and time associated with third-party data assets
● Measure activation impact on KPIs
By having control of their customer data, brands and agencies can pursue customer-centric planning, mapping and sequencing paid media interactions to consumer journeys down the funnel. Unifying online and offline data sources also increases first-party data signals.
Unleash the power of first-party data
There’s obviously a rupture in the value exchange between brands and consumers. Consumers expect better, more transparent use of their personal data. And they’ll rethink engaging with your brand if their expectations aren’t met.
Therefore, paid media teams that use a first-party data strategy built from unified customer profiles, in privacy-safe ways, stand to make more money by delivering better customer experiences.
However, according to the latest Arktic Fox Digital and Marketing In Focus Report, produced in partnership with Amperity, just over half (55 per cent) of Australian brands consider developing a first-party data strategy a significant priority this year. And, concerningly, only 11 per cent of businesses from the study say they have a “clear plan and path” they are implementing when it comes to evolving and adapting to changes in privacy and consent.
In fact, customers using Amperity for paid media campaigns have reported incredible results that are significantly impacting the bottom line. Let’s take a closer look:
● SPARC Group, a long-time Amperity customer, experienced a 5X ROAS, using predicted CLV (customer lifetime value) for segmentation.
● Wyndham Hotels & Resorts saw double-digit growth in ROAS in activated targeted audiences.
● Alaska Airlines experienced a 21 per cent cost savings in paid channels.
● Reckitt, a global Consumer Packaged Goods (CPG) company, has seen a 30 per cent improvement in match rates and significant uplift of seed audience size, leveraging its customer data in Amperity.
The road to driving customer acquisition and ROI is paved with first-party data
Businesses that act swiftly and strategically in adopting these practices position themselves for success in a privacy-conscious era. As the marketing landscape continues to evolve, those who embrace this transformative approach will forge ahead, delivering exceptional customer experiences and reaping the rewards of long-term growth.
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