The First party data world
Facebook & Google earned $84 billion & $147 billion advertising revenue respectively in 2020 amid Covid-19 pandemic and there has been consistent increase in their earning over the period of time. The duo have been utilizing consumer data that have visited their platform/website/application to understand their behavior and do marketing among them to earn the revenue. Of course this is not something new to most of the population on the globe. Digital marketing has been booming lately as various platforms(not only Facebook and Google) collect and target their user basis cookies data.
However, third party cookies age seem to be over with constant discussion around consumer data and privacy across the globe as Google is moving away from third party cookies to first party data.
Google said it will not track users as they browse online or use trackers in their products once third-party cookies are phased out from its Chrome browser.
On privacy and security note, Apple has critical to role to play too in promoting data privacy among the users. Apple have higher market share among developed markets with highest per capita income globally- the US, western Europe, China, Japan. Hence Apple move in the direction is likely to impact global digital market as well. However we will pause on Apple story as of now and discuss about first party data.
But what is first party data?
First-party data is any information that is directly collected by publishers/websites from their own audience or customers.
But how First party data differ from third party?
The first party data is associated with quality and perceived to give much better return of investment compared to third party cookies, why? It is because it does mostly consists of highly engaged users who are more likely to visit and sign for the website and more like to be receptive of website activities and advertisement. And hence will likely to drive majority of the website revenue - similar to 80:20 rule.
The transition from third party cookies to first party data won’t impact booming digital marketing to say the least, as marketers will continue to target users on digital devices as users continue to spend their lion’s share of daily time on them. Though time spent on PC has remained constant, time spent on mobile has grown dramatically over the period of time and at the same time spent on offline medium has shrunk.
The entire stakeholders involved in digital advertising world have scrambled to find solution in cookie less world. This is also best time for them to redesign their data solution, consumer strategy with first party data in mind and in fact improve it.
However, the move will likely benefit those who will be more agile and adopt faster - strategies their media plan around first party data. Coincidentally, European based organisations or those who operate in Europe already have some head start in this due to GDPR.
Publishers in the age of first party data
Similar to other digital platforms, publishers too are transitioning from third party cookies to first party data and the result are promising as well. “One of Insider’s clients, for example, saw a performance lift of 11% over the pre-existing campaign benchmarks when using the publisher’s first-party data in campaigns”
With all dominance of Google and Facebook and alike platform across the globe, a strong first-party data strategy empowers publishers to regain lost revenue.
To move forward each company, publisher, digital platform need to own their client and develop utmost trust, which will be first step for them to obtain first party data.
With the transition we are looking for quality over quantity and deriving result for niche group at a time - we can use the data to better identify users behavior for niche group, complement it with secondary sources- be it industry trend or survey to understand consumers and reach them more effectively.
Also, publishers can use newsletter to increase engagement and drive users from email to their platforms. This may help publishers in few ways:
- Help publishers in understanding their user’s requirement based on what content they subscribed.
- Help to push advertising based on content they subscribed/consumed.
- This could also clear path for subscription service, kind of next step in engagement.
Contextual advertising will also be the key
All above along with contextual marketing will have role to play to make targeting more effective. Contextual advertising is advertising that is targeted to the users basis the kind of content they are consuming, for instance, if I am reading tech related article on the website, it throws me ads related to smartphone or digital transformation. This can be also called behavioral based targeting.
