Five steps publishers should follow for a winning first-party data strategy

In AdTech, first-party data is taking over.?

Google’s decision to walk back from cookie deprecation may have softened the blow, but regulators’ focus on giving users more control over their personal information never wavered.?

Even cookies, though not deprecated, will likely require informed consent, making much third-party data unusable.?

All of the above explains why publishers are aggressively tapping into first-party data. At the same time, there’s a lot of uncertainty around how to make the most of audience data: how to collect and store it, how to ensure it is compliant, and how to unlock its full value.?

In today’s edition of Xenoss MadTech Digest, I offer a five-step framework for managing first-party data, covering tools and best practices for data storage, security, processing, monetization, and impact on content operations.?

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1. Building a strategy

Though publishers often feel sidelined in AdTech discussions, they ultimately have access to the industry’s bloodline—audience data. The ability to leverage that insight determines the publisher’s long-term viability and revenue.?

Before delving deeper into the tech required to build a first-party data stack, publishers should answer the following questions to lay the groundwork for their strategy.?

• What type of first-party data can the publisher access?
• What data still needs to be collected? Can a publisher start asking for it??
• Which data collection methods seem most promising??
• Where would the publisher store data?
• How do we ensure security and privacy compliance??
• How will a publisher process and activate first-party data??

When Google had the industry fretting over cookie deprecation, publishers were pushed to explore alternative identity and addressability tools using statistical modeling, AI, and machine learning.?

The threat of cookie deprecation is no longer as pressing, but it’s crucial to retain innovative technology developed over the last three years.?

Introducing new ways to collect first-party data can help publishers increase their revenue and improve advertiser relationships. Take Ranker, a pop culture publisher that saw a fourfold increase in yearly revenue thanks to expanding first-party data collection tools to surveys, analytics tools, and on-site voting.?

2. Build a tech stack for data storage

When a publisher decides on ways and tools to leverage for first-party data collection and processing, it’s time to choose the technology that will help drive growth.?

In our experience, these are the critical components of a first-party data stack.?

• Data lake. A data lake is a new approach to data storage that, unlike traditional databases, allows for the hosting of both structured and unstructured data. At the moment, Snowflake, Amazon Redshift, Google BigQuery, Oracle Data Warehousing, and Microsoft Azure have the lead in data lake solutions.?

• Data management platforms (DMP). Traditionally, DMPs were the go-to platforms for anonymizing and storing third-party data. Many platforms expanded their offerings to first- and second-party data storage as the focus shifted to first-party data. Modern DMPs help publishers create all-rounded customer identities, leverage lookalike modeling, and match audiences with advertisers in full compliance. Permutive and Lotame are excellent examples of DMPs with a broad range of features, from identity resolution and data enrichment to edge processing computations for advanced security.?

• Customer data platforms (CDP). CDP, now a rising technology I covered in an earlier digest, is a data storage solution designed with first-party data in mind. Unlike DMPs, which introduced first-party data capabilities as an afterthought, CDPs are designed to accommodate user information collected through informed consent and create customer profiles based on that data. Using the BlueConic CDP, Raycom Sports collected over 27,000 audience data points. The publisher used this data to create highly personalized customer profiles and get extra leverage in advertiser negotiations.?

Having the tools to store audience data helps address the concerns of data drought but the full value of these solutions comes to light when they operate as an interconnected system. Xenoss engineers have ample experience in building integrations that connect different types of solutions within a publisher’s data stack.?

Another caveat is that, although there are universal best practices publishers that help publishers increase the impact of first-party data, a case-by-case approach is needed to assemble a data stack that meets your data needs and captures unique data types you might be collecting.?

Finally, while some companies prefer relying on tried-and-true off-the-shelf solutions, other organizations have specific needs that go beyond the scope of data platforms on the market. A custom data stack might be a better option to meet the needs of these publishers.?

Besides, by opting for a tailor-made data stack, publishers can claim a higher fraction of revenue by cutting off intermediary fees.?

3. Ensuring privacy and compliance

AdTech operates within the dichotomy between advertisers striving for the highest personalization and regulators wanting to limit exposure and ensure privacy. Reconciling these frankly opposite viewpoints urges publishers to be adaptable and strategic.?

While some ignore unconsented data collection, risking multi-million-dollar fines, future-oriented media explore innovative tech supporting consent management.?

Consent management platforms (CMPs) are emerging as reliable and compliant solutions for ensuring consensual data collection. They help publishers stay compliant by streamlining three key aspects of consent management.?

• Capture. Publishers can set up user-facing prompts that allow audiences to consent to data processing.?

• Sharing consent, i.e., maintaining standardized privacy settings across multiple platforms and running regular assessments to stay GDPR-compliant.?

• Privacy settings. CMPs allow users to specify data sharing preferences, giving audiences more options beyond the binary opt-in/opt-out consent.?

Adopting a consent management platform helps publishers continue operations in Europe and California without the risk of a regulatory meltdown. Homa Games leveraged Usercentrics CMP to ensure compliant operations in the EU.?

By opening access to inventory in the EU and California, the game publisher reached a 10% ad LTV increase.?

4. Data utilization and monetization

An ironed-out data storage and processing pipeline helps publishers streamline workflows and address compliance concerns, but capitalizing on audience data above all requires a well-defined monetization approach.?

Publishers can unlock the value of their data in multiple ways, from licensing to partnering with data clean rooms, offering contextual targeting, or offering lead generation services.?

I summarized high-yield data monetization strategies in a single visual.

Adopting these strategies helps publishers improve their cash flow significantly. Since creating Project Habit, an analytics initiative aimed at increasing the number of paid subscriptions, the Wall Street Journal has discovered behavior patterns that turn casual readers into subscribers and started introducing ways to prompt and encourage these actions.?

Another US newspaper publisher adopted Mather, an audience monetization platform, to determine the potential of each content item as a premium inventory. The solution uses a score-based system to evaluate each article created by the publisher.?

5. Transforming content operations

Fundamentally, a shift towards first-party data is one more trigger for publishers to rethink and strengthen their relationships with their audiences. To keep readers consenting and engaging with data-gathering initiatives, publishers should go the extra mile in delivering high-value content.?

The good news is that all the steps publishers take to build a first-party data strategy also inform content ideation and help understand readers on a deeper, more personal level. The Financial Times, for example, created a system for analyzing first-party data to optimize customer acquisition and retention.?

The company used the RFV (short for Recency, Frequency, Volume) score to identify predictors of high-value readers. The financial publisher also replaced Views with Quality reads as the North Star metric.?

Bottom line

In a privacy-focused era, publishers hold the power by maximizing the value of first-party data. Media companies with the technology and processes for securely storing, processing, and monetizing audience data see significant improvements in conversion rates, lifetime customer value, and advertiser interests.?