How to create a sustainable first-party data strategy?

How to create a sustainable first-party data strategy?

While digital advertising is rapidly shifting from third-party identifiers toward a more privacy-driven approach, investing in first-party data is a strategy that can help marketers adapt and also help with low cost research.?

The problem with third-party data is that often it is available to many different companies while first-party data is unique to your business.?

But first, what is First- Party data? Ok, so this is the data that you collect with direct consent from consumers, through apps interactions and websites, and things like email and loyalty programs. When this is utilised responsibly, first-party data can help brands build direct relationships with their customers, create value and ultimately boost their advertising performance.

Think, how great this can be for product marketing?

For the past few years, Think with Google have partnered with Boston Consulting Group (BCG) to study how brands succeed with first-party data strategies and the data found ‘’that those using first-party data for key marketing functions achieved up to 2.9X revenue uplift and 1.5X increase in cost savings. Despite its clear benefits, however, most brands aren’t yet harnessing first-party data’s full potential.’’

The latest research with BCG, concludes that the large advertisers are using first-party data to gain a competitive edge and based on interviews with more than 20 brands and 7 agencies throughout the U.S. and Canada, and identified specific ways marketers can get more from their first-party data strategy while currently most brands aren’t yet harnessing first-party data’s full potential.

Here are five key things you can do:

1. Tailor to customer objectives

Don't hold yourself back and create a coordinated plan to guide choosing which data to collect, and how to analyse and activate it. Yes that means establishing clear customer experience goals and aligning them to business objectives. These goals can then help you differentiate between data that is required and data that is nice to have.

Example: Aim to drive loyalty

Solution: To invest in your loyalty program by making it your primary first-party data source. Then you could then use the program to provide discounts, redeemable points, and personalised offers for loyalty members to increase engagement with your brand and products.

Method: To create a plan with measurable goals to guide which data you collect and invest in and also calculate the cost of acquiring that data as well as related complexities, such as local compliance with privacy laws, risks of data breach, and impact on consumer trust. This helps you identify which data to prioritise.

2. Offer value in exchange for data

Aim: To reevaluate your first-party data strategy:, “Have we made it easy for customers to see the benefits of sharing their data with us?”?

Solution: Consent management is the key consideration here. If customers experience your brand through a website or app, for example, incorporating consent forms into the user experience should be a priority.

Method: Maintain customer trust is through strong data governance. By managing data properly and implementing processes that ensure data accuracy and integrity, you can avoid data breaches while improving data accuracy, timeliness, and usability.

3. Invest in tech and organisational enablers

Aim: To develop key capabilities related to data analysis and activation?

Solution: You can do these internally but also work with a trusted partner to fill any expertise gaps. Figure out where you have capability gaps and consider whether a new piece of technology is critical to meeting your business objectives. Keep in mind that adding new technology i.e. pumping out new features won’t help if you haven’t been able to connect your existing technology and data platforms.

Method: You can utilise strategic partnerships to uncover the benefits of first-party data, as other technology providers and platform partners bring external expertise and a deep understanding of data to better guide your strategy.

4. Test and learn to determine activation

Aim: To use first-party data to improve customer experiences.

Solution: To provide more personalised customer experiences by understanding and overseeing all touchpoints along the path to purchase by analysing data from various digital channels where people engaged with their products. This gives a clearer picture of how customers interact with the brand day to day.

Method: Identify which data sources were most helpful across the purchase journey, like search behaviours and website interactions and design a small test for a specific brand with a broad audience ( personalised approach increased the brand’s ROI between 12% and 35%, depending on the marketing channel= value based results).

5. Refine and validate with measurement

Aim: First-party data strategy is measurement.?

Solution:First-party data provides valuable insights that can help deliver better customer experiences and drive business results.?

Example:?

In one example of this, a well-known automobile brand used measurement to refine its approach to data collection and management. While the company used auto show contests as its primary source of data and lead generation, its measurement approach showed that the leads were not actionable.

As a result of this insight, the company shifted its focus to branded microsites that invited customers to design their own car. This approach provided more qualified, actionable leads and ultimately helped the automaker put its marketing spend behind fewer, more impactful campaigns.

Method: Measuring not just the effectiveness of the channel where you apply data but also the effectiveness of your data strategy can help you optimise your overall marketing strategy.

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