“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Gurman Hundal, Co-founder at Media IQ.
Accessing first-party data represents a significant opportunity in the ever-evolving, data-driven marketplace. But there are some obvious philosophical and organizational barriers to leveraging first-party data for campaign effectiveness: a lack of understanding on how to maximize the opportunity; privacy concerns; apathy (as basic retargeting makes money for everyone); and a lack of resources or investment, among others. Here are four key steps toward overcoming these barriers and effectively using first-party data:
Step 1: Demand better retargeting.
“Easy” doesn’t mean “effective.” Most programmatic trading on first-party data is basic retargeting off an advertiser’s site based on cookie data, which just highlights a user’s visit. This is an easy way to target an assumed audience and – more likely than not – takes advantage of loose attribution models.
Demand more from technology. To understand product information, revenue attributes, cross-brand/product data, offline CRM data and a hundred or more amazing insights into your consumer base, you need specific technology to distill this data. Whether this is a licensed DMP solution or an in-house data-warehousing management tool, you need specific and specialized technology that syncs with programmatic trading tools such as DSPs.
Step 3: Look for trends and insights in this data before buying against it.
Analyze, analyze, analyze. Once you have data collected in a granular, secure fashion, analysis is paramount to understand the best retargeting and CRM strategies for you. Look for trends and new insights about your audiences. Working closely with dedicated advertiser teams is key (most clients will have hefty analytics resources).
Yes, dynamic creative optimization works when you retarget someone who looked at “A” by showing them a creative of “A.” But what about product synergies, or cross-selling between brands and products? Not only will this deliver better ROI, it will also maximize the user experience.
Let’s take the example of a supermarket or grocery chain. If you know – from analyzing buying behavior – that you have users who regularly buy beer on Fridays, it makes sense to ensure their Monday-to-Wednesday creative message advertises complementary products.
Amazingly, in a secure, legal fashion, you can pick up offline loyalty data to confirm whether or not these customers bought these complementary products in-store over the weekend. This then enables you to measure offline return-on-ad-spend KPI against online activity.
Step 4: Don’t just use first-party data for retargeting and CRM.
Via predictive modeling, you can also use first-party data to extend your reach and prospect new customers. Let’s go back to user group A, which buys beer. If you share this information with another vendor, it may tell you that these users also love live music, have pets and earn $50,000 a year. Using complex statistical modeling, this vendor can now build a predictive set of prospects with characteristics similar to user group A who have never before bought beer from your supermarket or grocery. When you have an offer on beer, you can then push that creative message to this predictive set of new prospects.
This example also highlights how you can get value from multiple vendors working on a media schedule using first-party data. As you can see, it’s logical to centralize the retargeting and CRM efforts within the programmatic world. However, effective prospecting partners will have access to different data sets, and – more importantly – different modeling techniques. Trust is of immense importance when selecting these vendors.
While handling first-party data can appear to be very complex from the outside looking in, adhering to these guidelines can help you get the most out of it. The rewards can be game-changing: more customers, higher revenue, higher profit and a better customer experience overall. That’s the power of first-party data.