By Chris Hogg, Global Head of Platform Sales, Lotame
Data is at the heart of everything a modern business does, especially when it comes to delivering the best service and experience to customers. But with the depreciation of third-party cookies, brands could be left in the lurch, leaving them without a method to accurately pinpoint consumers as they progress on their purchase journey.
First-party data strategies have emerged as a powerful answer, but the challenge is how companies can effectively collect, manage, and make the most of this data in order to understand both known and unknown consumers.
The strength of first-party data
Simply put, first-party data can be defined as any data that a brand has collected from their customers directly and with their consent. With a range of data points collected both online and offline, it can provide a rich and insightful view of consumers, but brands must understand which data types offer them the most value and know how to use them.
Successfully striking this balance creates a deeper and more symbiotic relationship with existing customers and the learnings can be applied to better grab the attention of new customers.
Exploring the great unknown
Established customers form the backbone of any first-party data strategy. Collected through activities such as sign-ups to email newsletters, loyalty programmes, purchases or subscriptions, these consumers allow brands to track them via a unique identifier – such as an email address – that they have willingly provided.
Unknown audiences are customers that have engaged with a business – whether by visiting a website but not making a purchase or clicking on an ad – but who do not have a unique identifier assigned to them. These consumers have clearly signalled interest in a brand but are only visible as anonymised data.
Combining regular buyers with fleeting visitors
Combining and examining first-party and anonymised data allows marketers to understand how customers move throughout the sales funnel and join the dots between known customers’ touch points. There are two key tech solutions that can assist with this:
- Customer Data Platform (CDP): these are commonly used to bring together siloed sets of data. With a varied range of features and capabilities available to brands, CDPs allow for the centralisation of everything from email engagement to the SKU of products placed in a shopping cart for a single user.
- Data Management Platform (DMP): similarly these allow for the pooling of data, though they anonymise and aggregate first-party data gathered from unknown user profiles into audiences. These can then be analysed, allowing marketers to better improve campaign strategy and performance, gaining new customers in the process.
While DMPs are familiar to many businesses, CDPs have matured in recent years. For brands looking to analyse, model and activate first-party data at scale – both for known and unknown customers – these solutions give marketers actionable insights.
The strength of the union
While first-party data offers complex and rich insights to engage and retain existing customers, its weakness is its finite nature. Layering with other high-quality data helps to expand these parameters and fill the top of the sales funnel with new prospects.
The more that is known about your customer base as a whole – whether that be dedicated repeat purchases or drifting window shoppers – the better a brand can deliver relevant and personalised advertising. To have a fully optimised marketing campaign, a brand must have a first-party data strategy that is able to translate unknown audiences into known customers. This involves driving acquisition and prospecting, not just reaching out to existing customers.
The dream of all marketers is to get closer to the individual while maintaining the ability to aggregate anonymous data and target it inside one system. DMPs and CDPs can combine to make this a reality without the need to rely on third-party cookies. But despite the cookie deadline being pushed back, there is no time to waste; marketers must act now if they are to build a first-party data strategy that delivers both now and in the future.