By Oliver Betts, Head of Data Strategy at MediaCom
With the third anniversary of the GDPR having just passed, it’s important to pause and reflect on the ways that the regulation is impacting the media and advertising industry.
Fundamentally, data has been at the heart of both the media and marketing industries for a long time; but with the GDPR having restricted the ways that personal data can be collected and used, and Google reducing the ability of cookies to collate user data, the industry is set for a seismic shift from a third-party-centric model to a first-party-centric one.
Already, the GDPR has created an increased reliance on first-party data, and brands that struggle to collect this data on the same level as they could purchase third-party data will face huge ramifications.
The loss of third-party data
It’s clear that we have now entered a highly sensitive era of consent. Many marketers fear the potential loss of data will cripple behavioural targeting. The potential implication for businesses is that they will have to come up with innovative ways to maintain and improve customer trust.
Previously marketers leveraged the treasure troves of data to increase overall efficiencies and personalisation at scale. Ultimately a business’ end goal is to drive revenues while a consumer’s is to have a seamless experience that is least disruptive to their consumption habits.
For marketing and ad tech professionals, this boils down to knowing audiences well and being agile enough to tailor the user experience as much as possible. If brands lose access to this data, then many worry that their targeting capabilities could essentially regress back into the dark ages, leading us into an era of diminished personalisation.
Yet there is also an opportunity here for brands to find new ways to reconnect with consumers. For too long, digital advertising has become less impactful, less resonant and even less ethical in its use of data. The 21st century has given us digital innovation of the highest order, but now is the time for a great reset to make digital advertising the best it can be, with data at the very heart of it.
After the cookie crumbles; who are the real winners?
The brands with the biggest chance for success in a GDPR and post-cookie era are data-rich advertisers and retailers – such as Sky and Amazon – with the means of capturing large amounts of personal data directly from consumers. The data from these companies – and particularly the walled gardens of Facebook, Google et al – are going to be a lot more valuable than before. Those without the means to collect customer data directly from their sites or platforms will find it much harder to acquire the data that gives them valuable insights into consumer behaviour.
Arguably the biggest challenge after the removal of third-party data is how brands are going to serve content that is relevant and personable. Unfortunately nowadays, the accusation that content can be relevant but boring rings true more often than brands would like to admit. And this will be most felt at the bottom of the funnel through purchase and re-purchase rather than brand awareness at the very top.
The technological changes in how brands collect data will have a far larger impact on how the industry operates than just GDPR alone – which now feels like an aperitif to what will be the main course that is a cookieless future.
Zero-party data and the future of customer data collection
What’s likely to happen is that in exchange for more of consumers’ data, brands will incentivise their customers with discounts or even straight cash to “use” more of their data. Whether that’s a retailer offering customers 20% off their next sale or even loyalty points, consumers will likely part with their data if there is a compelling reason to. This is what we call “zero-party data” and is likely to be the future of customer data collection.
This type of data allows consumers to proactively state what they want from a brand in exchange for their personal information. It gives companies greater insight into consumers’ needs, interests and intent – unlike first-party data which can only offer insight generated from purchase history or basic facts like date of birth.
Brands using zero party data can be assured that customers actively want to hear from them – and will be engaged when they are targeted. There can even be greater clarity and accuracy in zero-party data, as brands do not have to infer preferences. Rather, the data comes directly from consumers themselves, allowing brands to build direct and personal relationships with them.
Ultimately, there are solutions to the reliance on third-party data that are practical, workable and far more ethical. They just require the right technology, the right strategy and the right investment.