We need to clear up some confusion around the “cookieless future.” The predominant view says first-party data will become the only currency that matters in digital marketing. But that’s not how it’s going to play out for one simple reason: a huge portion of marketing focuses on net-new audiences – talking to people you don’t know, people you may not have ever interacted with, people that most certainly aren’t within your first-party datasphere.
And there’s no way we’re going to accept a future where we can do sophisticated 1:1 messaging for known audiences – but are thrown back into the 1970s when it comes to talking to new audiences.
Why does this matter? Because recognizing the need to expand beyond first-party identifiers fundamentally changes how companies think about building out a future-ready mar tech stack – with some big implications for how many companies have designed their customer data platforms (CDPs) today.
First-party data can’t fill the top of the funnel
In case you haven’t heard, third-party cookies are going away … at some point … eventually. Among the endless analysis, advice and predictions around the cookieless future, two core axioms emerged: (1) First-party data will become a company’s most valuable and differentiating asset, and (2) every company needs to build a customer data platform to harness their first-party data.
Thousands (tens of thousands?) of organizations have invested in building CDPs in the last few years. The primary – and often only – objective of those CDP builds was constructing a platform to effectively capture a company’s authenticated first-party data from its own channels for activation.
This is all well and good. First-party identifiers will become even more valuable as cookies (finally) go away, and CDPs are essential infrastructure to harness and action on those first-party IDs. But what about all the marketing use cases where you’re going after net-new or anonymized individuals? Where you need help identifying new audiences and understanding these new targets?
This is no small concern; it forms the entire upper funnel of customer acquisition: paid media and advertising aimed at driving brand awareness and consideration. You can give me all the stats you can find on the efficiency and effectiveness of selling to existing customers, but every business still needs to bring in new customers if it wants to grow – or even just survive. And you can’t do that with first-party data; you need other identifiers.
Partner Data more than fills the void left by third-party cookie deprecation
Right now, many companies are still relying on third-party cookies to drive their upper funnel marketing efforts. Setting aside their looming demise (have you heard!?), I’m not the first, nor will I be the last, to point out that cookies were never the ideal – or even the best available – way of identifying net-new audiences.
There are a number of companies that have spent the last 20-30 years building incredibly deep profiles of U.S. households and individual consumers. In some cases, they use probabilistic matching to map devices, IP addresses and other digital identifiers to their offline profiles. That probabilistic matching has only gotten more accurate, reliable and powerful with the recent acceleration of AI tools and ML models.
In practice, these partner assets, commonly thought of as third-party data with durable identifiers, are often better than third-party cookies ever were in helping marketers identify, understand and effectively message to new audiences. Put simply, marketers cannot afford not to leverage partner data – not now, not in the … well, you know.
Not all CDPs are built to integrate partner data
The good news is that more and more marketers are starting to bring in partner data for upper-funnel marketing. But the key is understanding that you can’t treat partner data the same way as your first-party data. You can’t apply the same rules to probabilistic partner data as you use for your deterministic, authenticated customer data.
But the answer isn’t to just tack on a whole new, separate section to your CDP to house and action on partner data, or any data beyond first-party assets. This approach would be costly and inefficient, but it also creates problematic silos between first-party, third-party and any second-party data assets that may be explored in the future. Indeed, some of the most important value will come from the connection of first-party authenticated data and partner data. For example, reliable reconciliation when a prospect is driven to authenticate and comes into your first-party datasphere, you can use partner data attributes to enrich an existing profile to learn even more about them and continue to personalize with context. Without this integration, you’ll be wasting spend treating existing customers like new prospects.
As more marketers attempt to integrate their partner and first-party data, they’re realizing the architecture and data governance capabilities of some CDP solutions make this quite challenging. The reality is: Many CDP vendors built their solutions to do one thing (first-party data) really well. But far fewer took the broader view, building an agile, flexible, privacy-focused solution that’s ready to handle the inevitable nuance of what’s needed to function in the real world.
Is your CDP really built for the cookieless future?
You know as well as I do that we’re not yet living the cookieless future. Marketers are still able to lean on third-party cookies to keep their upper funnels full. But if companies think the CDP they have (or are putting) in place will solve all their problems when cookies finally do go away, they need to take a closer look.
Now is the time for every marketing leader to evaluate if their CDP can deliver on three key factors. The first is scale: With data volume and velocity growing exponentially, a CDP built for yesterday’s needs will quickly be underpowered. A modern mar tech stack needs to be ready for the hyperscale future.
With that scale comes the need for interoperability – what I’ve been preaching in this article. The CDP should be designed to enable easy data integration across different systems, departments and platforms within the organization – and that interoperability should extend beyond internal systems to partners on which the organization relies, such as advertising platforms, data providers, publishers and tech providers.
Lastly, the CDP must be built to ensure trust in a privacy-conscious world. That large-scale interoperability must be managed in strict compliance with requisite privacy laws. And the integration of first-party and partner data must be executed in a way that adds value for consumers – in the form of smarter, more relevant and useful marketing messages – without compromising their confidence in privacy.
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