First-Party Data Was Never Enough For Marketers. That’s Glaringly Obvious Now.

Adam Solomon"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 Adam Solomon, chief growth officer at Lotame.

Mid-30s cord-cutter woman lives in the city, eats out regularly, shops at high-end stores.

Two-car family of four lives in the burbs, commutes to the city, attends sports events, subscribes to meal-kit service.

That was then. Pre-COVID-19, creating these complex personas for marketers was hard work. First-party data was a good start for building a baseline of a target audience’s habits, but it was never enough. Third-party data filled in the gaps to arrive at more robust scenarios like those described above. It was a familiar routine to gather siloed data resources, scrub for inconsistencies, compile insights, model, compare, test, fail and start again.

This may not be a shocking revelation, but the world is changing faster and faster. We know on an intuitive level that consumers are changing where they live and work, what they watch, how they engage with the world, what they eat and where they shop, exercise and converse. How do you stay on top of these changes and deliver value to partners and consumers? If first-party data wasn’t enough before, it’s glaringly obvious it’s not sufficient to fully capture who the consumer is or what they’re up to.

Consider this familiar scenario.

In December 2019 a user identified as male visits a news site. He’s from the 11215 ZIP code. He reads top stories and maybe some real estate content.

In May 2020 that same user identified as male visits that same news site. Maybe he visits more often and spends more time on those top stories.

That user looks the same five months apart. But we all know that no one is the same as they were five months ago, let alone five days ago. The publisher view is simply not indicative of the drastic changes going on in and around that consumer’s life. Can the publisher determine that the male now works from home in the early morning and late in the evening, he’s home-schooling his children, he’s now the primary cook, he shops for groceries online, he watches more OTT documentary content than ever before and that he’s probably building a garden because he’s shopped a lot at Lowe’s?

It’s a no to all of those questions. From the publisher’s slim perspective, nothing has changed for that user except that he visits that site more often and spends more time on specific content. There’s no window into the drastic changes happening in his life. If an advertiser asks a publisher for an audience who shops for groceries online and watches documentaries, a publisher can’t deliver from first-party data alone. If that advertiser reaches out to that user without any expanded knowledge, the chances of that message falling flat are very high.

Third-party data is the key to unlocking a view of the actual life of the changing consumer.

A recent eMarketer interview with Aleks Niestroj, VMLY&R’s executive director of experience strategy and insights, made this point quite strikingly when discussing connected cars.

“As a brand, you’ve got to provide value to consumers; if that value exchange isn't there, then it’s not very sustainable. Connected car advertising will need to be something beyond driving past a Chick-fil-A and getting an ad for Chick-fil-A. It should know that I’m a vegetarian and I don't like Chick-fil-A. But I am a Starbucks fanatic, so it should say, "Hey we're driving past a Starbucks and I know you're 10 minutes ahead of schedule. We can make a detour, you can order your favorite coffee and still be three minutes ahead."

Tell me how a connected car advertiser – or any other brand – would understand those three diverse and very important customer behaviors without the benefit of third-party data? I’ll wait.

Consider the insight marketers might gain from third-party data segments around discretionary spending. People shopping at high-end stores in the past are clearly not buying work clothes or special occasion wear so what are those people doing now? We know intuitively that online content consumption has increased, but what is the correlation between those audiences that dined out regularly with segments researching recipes? Those in-market to buy an SUV or minivan might index higher as families. Why? With summer upon us and travel plans on hold, road trips and other activities may see increased interest. Or, most relevant to COVID-19, are segments related to occupation. Those in health care audiences are working longer hours than those in retail or restaurants who may be furloughed. How can you reach these different audiences in meaningful and respectful ways that take into careful consideration the changes in their worlds? Well, friends, third-party data can lead you in the right direction and a whole lot more.

At this pivotal moment in time, information about the changing habits of consumers is at a premium and I’d argue it’s table stakes to keeping any business open. A consumer visiting a site or downloading a coupon is interesting, but it’s putting your toe at the starting line and standing still. Marketers need every signal, connection and data point at their disposal to build a comprehensive picture of customers that’s true, reliable and relevant. (So do publishers, by the way.)

Consumers are complicated. As our world contracts and expands in new directions, we change along with it. Our passions, interests and behaviors evolve or pivot. We discard old habits and embrace new ones. We perhaps try things we never dreamed of, such as sewing a mask out of a T-shirt, learning how to make a souffle, home-schooling our children or adapting to a socially distanced work environment. And, all of these things at once!

I, for one, could never have imagined the drastic changes in my professional and personal life over the last few months. There’s much to learn from and apply to improving our ecosystem, connecting people in positive ways and advancing the health, well-being and prosperity of advertisers, publishers and consumers.

Follow Adam Solomon (@adam_solo), Lotame (@Lotame) and AdExchanger (@adexchanger) on Twitter.

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1 Comment

  1. This has some excellent points! Especially with the self-driving car scenario. However, I feel it fails to emphasize the fact that combining more data points (presumably with off-the-shelf Lotame segments or even custom ones) is extremely expensive. Further, the people of California have, though their legislature and the CCPA and the CPRA (possibly on the November ballot) that they do not like this level of targeted advertising.

    Yes, there is extreme value for brands with such targeting. But consumers in California (and possibly otherwise) might rather have an irrelevant ad over a completely creepy, all-too-familiar, track-my-every-movement type of ad.

    Reply

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