As tech giant Google readies to phase out third-party cookies starting middle of 2024 on Chrome, it is believed that marketers have already begun to invest to build first-party data sets and this is expected to further catapult the game of marketing. “It is imperative for marketers to adapt. Because the concerns surrounding diminishing returns on third-party data strategies are real, touching issues such as privacy regulations, data accuracy, ad blocking, and the pervasive threat of ad fraud,” Sapna Sharma, co-founder and COO, Efficacy Worldwide, told BrandWagon Online.
During a 2022 survey carried out among business managers and above who were familiar with their company’s customer experience, marketing tech, or customer data strategies from various countries across the globe, 54% stated their brands used exclusively first-party data to personalise customer experiences because the data is higher quality than other data while 39% said first-party data was easier to manage because their brand owned it, as per a recent report by Statista, a market research firm.
Why first-party data?
To be sure, first-party data holds a pivotal position in marketing as it originates from genuine engagements with your brand across a diverse range of consumer touchpoints, encompassing both historical and real-time interactions. This data is distinct from the actions of lookalikes that transpired weeks or months ago. It constitutes the information entrusted to you by individuals in exchange for your superior product or service. Importantly, it stands as the sole source of data providing the insights and control necessary to discern, connect with, and respond to customers in more meaningful and valuable ways. “First-party data collection is an ethical way of gathering information, where consumers willingly provide data to the brands they trust. The ROI in this approach is twofold. Firstly, it involves creating a loyal customer base by tailoring experiences based on their preferences and delivering services promptly. In the age of 24/7 connectivity and instant information gratification, this becomes crucial,” Nitin Singhal, managing director, Sinch, said.
Secondly, industry experts point out that first-party data can be monetised through Data Federation, allowing organisations to expose anonymised attributes to partners with consumer consent. For instance, targeting individuals who have flown business class in the last six months without revealing personal details. This second level of monetisation offers opportunities for partner brands to deliver targeted information through apps or website ads. What marketers need to understand is that Google isn’t the first to decide to phase out third-party cookies. Mozilla’s Firefox began to block cookies in 2019, and extensions for privacy-conscious consumers have been prevalent for blocking third-party cookies for many years. “And yet, the effectiveness of marketing by first parties hasn’t dwindled. Some measures that have been in this regard and can be taken up for future first-person marketing include collaborating with other contextual brands to collect data through first-party means pooling the data analysing them and entering into a symbiotically beneficial marketing relationship with the other brands,” Gauri Bhasin, COO and executive director, marketing, outreach, admissions and learning and development, Manav Rachna Educational Institutions, added.
According to the latest study by Statista on leveraging consumer data for marketing in India conducted in FY22, the education sector was in the lead among the surveyed industries that relied entirely on first-party data, as indicated by 29% of responses. Meanwhile, retail and e-commerce were the leading verticals in terms of primarily using first-party data complemented by third-party data.
Need for co-existence
Interestingly, even as companies are prepared for the demise of third-party party-cookies, a certain school of thought opines that perhaps the duo can co-exist. During a 2022 survey carried out among business managers and above who were familiar with their company’s customer experience, marketing tech, or customer data strategies from various countries across the globe, 37% stated their brands used exclusively first-party data to personalise customer experiences. A year earlier, the share stood at 31%, data from Statista, revealed. “Brands are drawn to third-party data as it gives them comprehensive insights into consumer behaviour, which has in turn enabled targeted marketing strategies and personalised campaigns. They have been able to leverage this external data source which has helped in optimising advertising efforts as well as a deeper audience understanding. The competition is going to be high, and brands may increase offerings while vying for first-party data. However, it’s going to be a struggle for traditional businesses that are reliant on third-party data but do not have digital assets to capture first-party data,” Prashant Puri, CEO and co-founder, AdLift, explained.
However, some experts are quick to point out that first-party is the future. Experts opine that the pivot towards a first-party data-centric marketing strategy is undeniably transformative. By switching, businesses gain a myriad of advantages from refined targeting and heightened personalisation to compliance with privacy regulations. “Moreover, the power of zero-party data, willingly shared by consumers, cannot be understated in enhancing user experiences and building trust. You control the data. By wielding control over the data, brands dictate the trajectory of customer relationships. In this era of constant evolution, this control becomes a strategic asset. Finally, the integration of AI-driven analytics and real-time insights emerges as indispensable. These tools not only refine marketing strategies but also facilitate nimble adjustments and provide an unparalleled measure of success,” Sapna Sharma, COO and co-founder, Efficacy Worldwide, said.
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https://www.financialexpress.com/business/brandwagon-bid-adieu-to-googles-third-party-cookies-how-switching-to-first-party-data-can-catapult-the-marketing-game-3313575/
