Interviews, insight & analysis on digital media & marketing

Marketers risk tunnel vision by fixating on first-party data

NDA, in partnership with Xandr, is collecting the views of some of our industry’s leading figures for their predictions on 2022 and beyond. Next up is Colette Munnelly, Solutions Engineer, Xandr.

As 2022 gets underway, many marketers are still firmly focused on finding alternative ways to serve ads to their target audiences.

This year, I expect to see many brands and their agencies place their bets on a carefully selected number of identity and targeting solutions for the post-cookie era. Many of the solutions that were discussed last year depend on advertisers having access to their own first-party data (consented data collected directly by the brand from the customer) which allows for targeting in a privacy-compliant way. If you have a direct relationship with the consumer, like a major retailer with a strong loyalty programme, this may be the best solution as consumers are generally happy to share their email address in return for points or rewards. But it’s not so useful if you are an FMCG brand making most of your sales through third-party retailers.

On the other side, publishers may be hesitant to make their regular readers sign in through fear that such a move could damage their readership numbers. If not relying on this first-party data, how will they optimise the value of their non-addressable inventory?

Reaching the non-addressable audience

It is broadly estimated that once third-party cookies are completely phased out, roughly 20% of the web will be ‘addressable’ while 80% will not. That will vary between brands and publishers but is indicative of advertising on the open web.

Right now the industry is fixated on identity solutions to reach the 20%. In doing so, many could be making a serious mistake. After all, isn’t reaching new audiences and unknown users one of the key fundamentals of marketing and brand growth?

The anonymous 80% may be harder to reach but there are very valuable customers to be found there. Just because a consumer hasn’t given a brand their email address and granted them permission to use it in marketing does not mean they are not a good prospect. If the ‘addressable’ portion is synonymous with bottom of the sales and marketing funnel, where brands try to push a purchase decision over the line for a core group of users, the anonymous 80% reflects the top and must be used effectively to generate leads and drive brand awareness.

The future in context

As a result, contextual advertising (which has no need for an ID) has moved back onto the radar of many marketers. By looking at the user’s environment and the content they are consuming rather than the user itself, marketers can achieve a level of understanding about the individual and use this to find similar segments of users that effectively provide a replacement for third-party cookies.

As well as traditional semantic and keyword contextual targeting, there are a host of options available for advertisers to reach the non-addressable 80%. First-party data modeling is key to this, taking a limited volume of first-party data and using it as a seed from which to extrapolate and identify ‘lookalike’ audiences on the open, anonymous web.

That initial data set could be first-party data, or it could be data from a successful live or completed campaign that the brand wants to emulate further. These tactics help brands reach that lucrative net new audience without relying on an identifier at all.

Beating the competition

While advertisers and their agencies close-in on their preferred post-cookie identity strategy, first-party data modeling can be used to achieve the scale and the reach that buyers are demanding from suppliers by finding target audiences across the whole web, rather than simply chasing the addressable 20% that everyone is competing over.

At Xandr, we are keeping an open mind on the future solutions for identity changes, by pursuing a multi-faceted approach to the post-cookie challenge.

We recognise that solutions based on alternative identifiers, or first-party data matching between brands and publishers, or pure contextual will also have a role to play for our clients, depending on their particular needs.  As pressure mounts to make a decision on your long-term identity strategy, my advice is to remove the blinkers and consider all your options.

You’ll find there’s more to targeted advertising than just first-party data.

Opinion, Predictions

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