First-Party Data Is About To Become Even More Compelling

tomflanaganData-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 Tom Flanagan, director of strategic partnerships at DataXu.

The digital advertising industry has long been shouting about the importance of applying first-party data to targeted digital advertising. Although some may think the promise of first-party data has been overhyped, I see it becoming even more compelling in two ways.

First, the breadth of connected devices and addressable interfaces will expand and the links among these devices and interfaces will mature. An expanded consumer data graph will multiply both the complexity and the opportunity facing brand marketers. Second, this data management and analytics layer will be novel in that it will be directly integrated with a comprehensive suite of consumer communication and marketing execution tools that span the spectrum of paid and owned media touch points.

In this future state, communication with consumers will be omnichannel and truly flow both ways. Brands will have the opportunity to pick and choose the most effective mediums to connect with particular consumers or households, and they will bring back valuable data every time they make those connections. Each connected TV ad, email or mobile app push notification will feed into a decision system that refines the content and overall mix of future communications. Available and appropriate deterministic one-to-one data will be used. In other contexts, consumers will be aggregated into microsegments that are much more granular than the broad demographic strokes that we lean on today.

A third context is walled gardens. It’s likely that in these contexts, granular data will go in but only aggregate data will come back out. Brands need to adjust and effectively load-balance their tools to capture and leverage the available data from each consumer touch point.

How does this ever-expanding network of probabilistic and deterministic consumer identifiers and connections move the needle for brands? It allows brands to realize two visions that are underway but not yet fully realized: reduced waste in marketing and media investments and improved ability to create and manage a more holistic customer experience.

Take the consumer packaged goods (CPG) vertical. The following sequence of tactics makes possible a more personalized and engaging dialogue with the consumer than was previously conceivable. In return, this two-way communication model will deliver back to the marketer a nuanced and comprehensive view of his or her customer base:

  1. Connected TV and mobile video ads generate demand for a new healthy food item with children in the household.
  1. Desktop and laptop devices in the household receive brand messages highlighting the nutritional benefits of the new product.
  1. Emails to the household’s newsletter subscriber share snack recipe ideas that use the new product in a number of creative ways.
  1. A smartphone user from the household enters a retail store one week later, is noticed by a beacon and presented with a promotional message in real time with a coupon to encourage purchase.
  1. The coupon is redeemed at checkout, closing the loop and confirming a purchase to the brand.

Rather than assigning full attribution credit to the mobile coupon, the brand ties the sale back to the household and considers the impact of each component of its household communications in a holistic attribution analysis.

The accuracy and depth of this analysis will continue to be enhanced as the industry begins to roll out new people-based marketing platforms. Two-way feedback loops created by connected watches, refrigerators, ovens and automobiles will further solidify the coverage and accuracy of true omnichannel graphs within our Internet of Things.

This will play out across all verticals, ultimately leading to more engaged and successful experiences for all brands and consumers. Stay tuned.

Follow DataXu (@DataXu) and AdExchanger (@adexchanger) on Twitter.

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  1. Hi

    Excellent article and I completely agree with you! With The data we create and copy is expected to reach 44 zettabytes (44 trillion gigabytes) annually by 2020, there is no doubt data is going to change the whole way how businesses work. Coming to your point, yes, Second party data may have got the spotlight for now, but there is no denying the value first party data commands. the promise of first party data from econsultancy indicates 81 percent of marketers who experienced an impressive return on data investments gave credit to their use of first party data while 49 percent mentioned their intent to increase their use of first party data which is a clear indication first party data is the hottest asset any business can have.

  2. First-party data is the backbone of business because it is acquired through consumer engagement. If used well, it results in highly targeted campaigns and sales. You can get this data by simply implementing social login to your website. It makes registration process simple and quick and allows users to authenticate themselves by using their digital identity.