How to Make the Most of Your First-Party Data

Since the inception of the cookie in 1994, digital advertisers have heavily relied on third-party cookies for various techniques such as audience targeting, retargeting, geo-based retargeting, cross-device targeting and tracking, frequency capping, and attribution. However, the era of third-party cookies is fading away, driven by the collective push from regulators, consumers, and tech providers advocating for advertising methods that prioritize consumer privacy.

Although Google has postponed the deprecation of third-party cookies in Chrome until the second half of 2024, it’s evident that businesses must promptly prioritize consumer privacy. The year 2022 marked a significant milestone for data privacy-focused regulations, with regulators intensifying enforcement actions against companies like Sephora, BNSF Railway Co., and TikTok. With 86% of US consumers expressing growing concerns about data privacy, advertisers cannot afford to delay the integration of alternative targeting tactics into their marketing strategies.

While brands and agencies must adopt a combination of solutions to move beyond third-party cookies, first-party data emerges as a key player in helping advertisers deliver messages to the right audience, in the right context, at the right moments. Before delving into examples of maximizing first-party data’s value, let’s explore why first-party data is a winner in a consumer privacy-focused world.

Benefits of First-Party Data

1. Privacy Compliance: Users willingly provide their first-party data to brands, strengthening trust. Transparency in data usage is crucial, and younger generations, such as millennials and Gen Z, consider it a basic human right.
2. Quality and Accuracy in Personalization and Targeting: With nearly 90% of consumers favoring personalized offers, first-party data, obtained directly from users, ensures high accuracy and reliability in personalization efforts. Each data point represents someone genuinely interested in the brand’s offerings.

Four Ways to Scale Your First-Party Data

Despite concerns about scalability, advertisers can amplify their first-party data through strategic approaches:

1. Create Targetable Audiences with a CRM: Invest in a Customer Relationship Management (CRM) platform to collect and store customer information. Leverage addressable segments created from CRM data for effective and valuable targeting.
2. Audience Profiling and Insights: Utilize strategic data partnerships and advertising automation to create detailed user profiles, incorporating demographics, interests, and buying behavior. This enables more personalized marketing strategies.
3. Look-a-like Modeling: Amplify first-party data by identifying audiences similar to existing consumer profiles. Machine learning technology can create large-scale audiences from a smaller amount of first-party data, providing accurate results.
4. Layering First-Party Data with Contextual Targeting: Combine first-party data with contextual targeting for a personalized consumer experience. Contextual targeting, based on content rather than user IDs, is privacy-compliant, and when coupled with first-party data, it enhances targeting capabilities.

Wrapping Up

While privacy-compliant advertising is not yet the norm, the industry is rapidly moving in that direction. In preparation for the loss of third-party cookies in Chrome, it is crucial to implement robust methods for leveraging first-party data. Early adopters testing these methods now will gain a significant competitive advantage over procrastinators. Let the early adopters lead the way to success.