Josh Hull – Edit’s Strategic Consulting Director, addresses the impending end of third-party data and explores your options on data-led marketing, in the first of a series of blog posts addressing the coming changes.
A shift is occurring in Global Digital Marketing Strategy.
For Brands, this will affect the third-party data, and how the organisation currently uses audience data, and will need to address:
- How they are investing in audience data
- Key challenges for digital marketers at Brands
- Their readiness for the loss of third-party cookies and identifiers, and the kinds of changes that marketing & tech stakeholders should make.
The loss of third-party data will lead the shift to first-party data (data directly from consumers who consent to sharing it) creating much more clarity on behavioural and demographic insights that currently help create target audiences and segments.
Strategically speaking for CRM, brands will now need to depend primarily on their own first-party data, or on data collected from “explicit data vessels” such as social, contextual targeting, and greater support from data acquisition process/strategy.
CRM, loyalty, and Value Exchange Strategy will require preparedness to create opportunity—and an imperative—to redesign data solutions to enable true multi-channel personalisation (MCP).
MCP, in a first-party data context means to sustain consumer relationships that produce a value exchange, across all marketing channels, in exchange for personal data. Data usage that is based on trust.
Brands will need to build new data strategies, and redefined CRM strategies, that rely on first-party data. To explain this; in this context, by data strategy we mean a “Permissions/Consent” strategy, and by CRM strategy we mean transitioning to a “Consumer Preference” approach.
My personal experience suggests that Brands will need updated contextual targeting and more probabilistic audience modelling (analytics that incorporate an array of online/offline and quality/quantity variables).
“To open the door to true first-party personalisation, Brands should today be reviewing their approaches to obtaining and managing data. Discovering an advanced CRM strategy enabled by the right data solutions for them.”
What matters right now? – Permissions to Preference
Permission Consent with no pro-active strategy for preferential first-party consumer data creates less formal and consistent protections.
Ambiguous Permissions to Preference strategies will not work.
One way to think of this is to look back at how relevancy of Digital Retargeting advertising, especially social media marketing, has significantly progressed and strategically advanced in the past decade.
In developing the Permissions to Preference strategies, in first-party Social CRM, Brands have most likely relied on a combination of first- and third-party data to help target audiences, especially from an actionable Insight (Data Science) perspective.
In the near term, we would expect Brands to rely more on ‘controlled and protected data capture approaches’ (such as competition entry, app engagement, and social networks) to drive audience targeting, given the existing intimate knowledge of consumer affinities and their wide reach.
To recap, there are 3 primary considerations:
- Permission to Preference – how is this defined for your Brand?
- Learning from your personalised Digital Retargeting strategies – how did this effect, positively/negatively, the ROI?
- Multiple sources across multiple touchpoints for First-Party Data capture points.
Brands can continue to rely on their existing first-party data as they invest in the revamped consumer experiences that allow them to extend their access to this data.
However, for Brands currently disconnected from the retail transaction, this data will be less common and likely less effective.
In all cases, Brands will face the challenge—and opportunity—of combining data from multiple sources for existing multi-channel campaigns, while also building data strategy to take advantage of the many new addressable media channels such as connected TV, digital audio, and home solutions that also use first-party data.
Moving from third-party cookies and identifiers, Brands will find that the value of direct engagement with consumers will further increase. To create consumer connections, Brands should create experiences that consumers consider worthwhile.
“Brands will also need to identify the investments and operating approaches that will help them stay connected with as many consumers as possible, in a personalised way, across all available channels.”
Rethinking Earning and Managing Consumer Data
All data strategy should be informed by the “brand promise”.
Organisations that I have been developing first-party data strategy alongside have found strong consumer engagement in sectors such as travel, retail, entertainment, and financial services. These sectors have a relatively firm footing because maintaining a value exchange with customers is the norm.
I have also found that, from a Brand perspective, connecting consumers to the Brand and vice-versa, in sectors that are usually removed from the customer transaction, (such as automotive, and pharmaceuticals), by contrast, lack dependable Value Exchange and Loyalty playbooks. Managing the consumer experience, partnering to share data, and updating data management will all be important.
Create Consumer Trust with Compelling Consumer Experiences
“Brands can be most prepared by creating Value exchange strategies that are designed around consumer experiences.”
Remember, in first party data we are asking consumers to actively consent to sharing data (for instance, transparency on data collected, visibility into value exchange, data collection seamlessly embedded into user experience), using our old friend, the preference strategy!
Experiences that are valuable to consumers tend to generate a 2-way data flow as a by-product.
Where do we go from here then?
“The right experience will depend, almost exclusively on the brands definition of the Brand Experience”
In the long term, loyalty is defined then rewarded within the relationship building.
Consumer experiences should facilitate Value Exchange.
Managing the consumer experience will be a balance between offering truly Personalised and Authenticated content; content that is authenticated against what is learned from the engagement behaviour of the first-party data collected.
Data Science methodology built on “Asking the Data” is useful in concluding this overview piece of the strategic opportunity of First– Party Data.
Brands should be entirely focussed on using all available Customer Journey data points – to derive a Next Best action marketing strategy to encourage consumers to engage regularly and consistently – using the data that was explicitly asked for and given.
An Engagement Scoring model will give insight that lends itself to proprietary 360-degree views of the consumer maps.
These identity maps will connect consumer touchpoints with marketing signals to provide a single, reliable, 360-degree view of customers.
“Data Systems and Martech will need to be able to consume, process and orchestrate unique ID maps from a number of sources (such as CDP to and from a CRM System). The same within Journey Orchestration systems and strategy across multiple channels”
At the same time, analytics teams will need to shift from deterministic modelling (analytics that uses one-to-one consumer data) to probabilistic modelling (which provides a probable range of outcomes) for campaign efficacy. This change in methodology means that Brands should set new expectations on how to target, track, and manage first-party data Marketing Communications & CRM.