In the field of ad targeting, a major shift is forthcoming.
This is post the decision of Google to eliminate the use of third-party cookies and the eventual decline of third-party data.
As traditional methods related to ad targeting fail, brands are now expected to explore new possibilities to reach and engage their audiences in a personalized and targeted manner. Using first-party, real-time data activation is an effective option.
As a number of brand marketers turn their focus to first-party data, the question comes up: “What is first-party, real-time data activation? How does it solve the issue of audience targeting in the post-third-party cookie generation?”
What is First-party Data?
First-party data is also known as proprietary data. This typically refers to information gathered directly from individuals by a brand or business. This information includes real-time insights into customer-centric behavior, interactions, and preferences. First-party data serves as the foundation for delivering personalized customer experiences and supporting targeted marketing campaigns.
First-party data is unique from second-party and third-party data, referring to customer-centric data from external sources.
How Do Businesses Collect First-party Data?
Businesses engage users across different touchpoints to come across relevant first-party data. These touchpoints can refer to activities in which a customer will visit the website, interact on social media, or use a mobile app. Brands collect core information, including email addresses and purchase history, at the time of such interactions.
Importance of Collecting and Using First-party Data
First-party data is known to contain behavioral and transactional information associated with identifiable users or logged-in users. Therefore, this type of information is usually linked directly to users. In turn, this aspect makes first-party data highly secure. As a matter of fact, a majority of it is classified as personal data under the GDPR (General Data Protection Regulation). Therefore, this form of data is subject to strict compliance regulations.
Moreover, the trust placed by users in the company is directly linked to any mishandling that could significantly damage loyalty between users and the organization.
Use Cases of First-party Real-Time Data Activation
Retargeting: With the help of retargeting campaigns, businesses create ads to re-engage users who might have previously interacted with the brand but have not completed the desired action, like making a purchase.
As a business owner, when you design your retargeting efforts according to the basics of first-party data, you can re-engage with existing customers to upsell them on new products. This is because they are already present in the customer relationship management (CRM) tool of your business. However, this could be a less effective strategy for prospecting campaigns, as these prospects might not have purchased anything. So, they would not land in your CRM.
Audience Exclusion: A brand can have a certain audience that it does not want to target as part of its advertising efforts (like existing customers when brands attempt to find new customers as the goal of the marketing campaign), the role of audience exclusion comes into play.
With this mechanism, brands can make sure that these excluded groups will not see their ads. When brands ensure audience exclusion with first-party data, it typically includes two basic actions: excluding existing customers from targeting and covering publisher segments that might not align with the brand’s audience.
Similar Audiences: Similar or lookalike audiences are groups whose traits closely resemble those of the existing customers. This group of users is specifically interested in when you execute prospecting campaigns to get new customers. This is because these groups allow a business to commence from a seed audience featuring existing customers while extending the same to similar users in the given inventory.
Tips to Brands to Ensure First-Party Real-time Data Activation
First-party real-time data activation involves converting raw information into specific audiences that can be targeted with ads. There are several methods to achieve this. Here are some important methods:
Customer Matching: This advanced solution allows brands to target audiences within the given ecosystem based on the existing list of prospects or customers. To start this mechanism, the brand goes ahead with sending a list of users to publishers, either through text or hashed emails.
To make this approach highly effective, a brand should readily share its first-party data with media publishers. The brand is also expected to possess confidence in the overall effectiveness of the lookalike targeting provided by the publishers.
Customer-centric Data Platforms: CDPs or Customer Data Platforms serve as advanced technology solutions that help in curating and consolidating first-party data. Brands can use a CDP to ensure first-party data activation as a valid choice if the brand is willing to share its first-party data with media platforms.
Identity Providers: Their role is to link and combine customer-centric data from different channels and devices to develop a solid customer perspective. This is known as the identity graph. With this technique, they help create unique IDs operating across the demand & supply end of the ad-ecosystem for ensuring precise targeting.
Through the identification of user identities, brands are able to trust the existing insights obtained from first-party data and that they are based on reliable information. This helps in targeted marketing and builds trust with customers.
Google PAIR: Google’s PAIR or Publisher Advertiser Identity Reconciliation is an advanced solution that enables organizations to gather relevant insights from mixed datasets without compromising personal privacy. This privacy-protection approach ensures that sensitive information is protected while still allowing for valuable data collaboration.
Conventional Data Clean Rooms: These solutions offer a secure environment for diverse entities to collaborate on relevant insights without sharing sensitive information directly.
When a business invites the publisher to the data clean room, the technology aims to match the first-party data of the brand to the publisher’s data. Usually, the publisher then uses the available list of matched customers to come up with a personalized audience that a brand is capable of activating.
Conclusion
First-party real-time data activation is a strategic theory in the modern world where privacy regulations are becoming stricter and consumer expectations continue to grow. When brands use data collected directly from the customers, they gain unique benefits, including better accuracy, in-depth personalization, and complete control over the marketing strategy.
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