Moving To A First-Party Data Model Era

Malcolm Treanor [featured] is the COO of Aussie media technology company WINR. In this piece, he looks at how the industry is moving to a first-party data model and what this might mean looking forward.

It’s been almost 30 years since the first banner ad was served on the web. And my, how things have changed. Back then, banner ads created a storm; generating frenzies that secured click-through rates of over 40 per cent.

What we didn’t know at the time was that the first banner ad would change the course of advertising forever, paving the way for a rise in programmatic ad-technology and laying the foundations of the third-party cookie model. Like a chain reaction, we witnessed thousands of brands flocking to banner advertising in a bid to keep up, making sweet on the promise of “eyeballs and “clicks”.

Today, however, as a general rule, people don’t click on banner ads; certainly not often. And, usually not even on purpose. The rise of adblockers, combined with an increasingly distrusting consumer base, have been heavy blows to the industry pushing brands to explore alternatives.

The changing tactics of targeting

In a bid to combat the plummeting rates of digital ad performance, many brands turned to global platforms such as Google and Facebook to help deliver content to their audiences. After all, they had the means to segment audiences by anything from geography to gender.

And so, an era of social advertising was formed. While it worked well for a while, the challenge today is that most publishers and advertisers rely exclusively on this third-party consumer data. A model that is monopolised by only a handful of players. This means balance and equality have disappeared – with an overreliance on third parties and cookie-based identifiers for ad delivery becoming the new norm. As a result, publishers and advertisers have under-invested in the collection of first-party data.

A time for change

While the recent heightened uncertainty of the adtech supply chain landscape might have led some publishers to look at mitigation strategies, many publishers opted for a ‘head in the sand’ mentality. They simply did not “deal” with the issue of audiences and data.

Regulators like the ACCC might be able to restore some balance, but fundamentally, change cannot happen if publishers don’t step up. They must take control of their most important but often overlooked asset – first-party data – to survive.

Simple strategies to start fostering more first-party data

First-party data is the information brands collect directly from their audiences. It includes inferred data (from behaviours, actions, or interests) alongside declared (such as email, age, gender, and self-reported preferences, sentiment, and intent).

Globally, publishers are re-investing in reader registration and subscription strategies that deliver declared data at scale, the most common being verified email data that can be used in newsletter programs.

Email newsletters remain one of the best ways for publishers to engage directly and meaningfully with their readers and contribute to a positive ROI. Email also provides risk mitigation should Facebook decide (once again) to stop allowing publishers and readers from sharing news on the platform. There are several opportunities to consider:

1. Driving loyalty– quite simply, newsletter subscribers visit websites more frequently, consume more content, and convert to paying customers at a higher rate than social referrals. The business case for brands is clear.
2. Improving ROI – if brands can regularly pull together good content, consumers will make a habit out of reading it (and clicking on its links). The knock-on effect is readers will engage with ads at higher rates than typical website visitors, particularly if the ad includes similar messaging to the surrounding content.
3. Building engagement and traffic– the Facebook news ban in February saw a 30 per cent drop in site visits overnight. Mature newsletter programs can deliver an average of 10 per cent in overall website traffic. In fact, committed newsletter subscribers consistently generate the highest page views, lowest bounce rates, and highest-paid subscription rates

Many publishers are starting to reinvent email newsletter strategies to drive revenues and keep connected with their audiences. This is part of a movement towards an era of first-party data models – where publishers are removing the shackles of global platforms, data collection methods, and risks.