First-party data is key in a new era for digital advertising

The end of third-party cookies will be one of the greatest internet disruptions ever seen. With the announcement by Chrome, the majority of the browser market will end the use of third-party data by 2022. With this move, browsers will meet the increasing demands of users regarding privacy, transparency and control of their data. Consent, consumer trust and the human experience should already be a priority; but with the end of third-party cookies, they become an absolute necessity.

Third-party cookies have been around for over 25 years and are the bedrock of digital advertising. Advertisers combine them with Google and Facebook profiles and data from other providers to build ‘digital profiles’—of you, me and everyone else who has been online in the past two decades. This identification, based on captured interactions, helps marketers recognise their audience and then target them with a tailored message to activate engagement. Third-party cookies also provide insight: they are used for view-through and conversion attribution and for cross-channel brand impact studies.

Don’t think that you’re not using any third party cookies; a tag from Google Ads or even a website optimization tool like Google Optimize or Hotjar makes use of this category of cookies. On the mobile part, Mobile Ad ID’s, are under scrutiny as well: Apple already announced the end of IDFA (IDentifier For Advertisers) in iOS 14 and Google is expected to follow shortly. This is a serious challenge for the industry.

The road ahead is paved with uncertainty. If your digital marketing is relying on—or even just using—third-party cookies or ad ID’s, you need to look ahead for a more resilient solution. The industry is discussing alternatives. Google is working on the Privacy Sandbox, which works in the browser and allows audience targeting via browser APIs. Apple and the IAB are looking into alternatives as well, with different implications for each solution and neither giving enough certainty to build upon.

First-Party Data Becomes Key

The key element of future success is your own ecosystem of first-party data. First-party data offers extensive opportunities to strengthen client relationships via owned media and can serve as an identifier for activation across platform.

Managing customer identities correctly, and building trust, enable you to make individual, meaningful connections with customers on a human level. This will help to elevate the human experience at every interaction.

With your first-party data at hand, you could cooperate with partners such as Google, Facebook and other social media apps and large search and e-commerce platforms to utilise it as a seed towards their algorithms. Those ‘walled gardens’ will not be as affected by the moving away from third-party cookies as will the rest of the programmatic universe, so now might be a good time to start using these platforms effectively. Email addresses and telephone numbers can, for example, be shared within these walled gardens to create a so-called custom audience to use within these ecosystems.

Identity Management and Building Trust

How do you build a first-party data ecosystem that elevates the human experience and matches any industry outcome? A solid first-party data ecosystem makes customer profiles available across the customer journey and recognises these profiles across channels using the right technology. A framework for first-party data might be a Customer Data Platform or Data Management Platform, that you either develop on your own or acquire from a vendor.

Either way, these five factors are essential: control & autonomy, ethics & responsibility, transparency, security & reliability, and usability (In an earlier blog we explored each of these factors). Considering these factors in your customer relationships also means respecting privacy laws. You can only store personal identifiable information if you have a solid reason. This means that you have to combine your advertising and attribution ambitions with your legal perspective. The question should be: How can you deepen the relationship with your customer based on his or her consent?

If you want to elevate the user experience, building trust is essential. Every touchpoint is part of the conversation between you and your client and an opportunity to increase trust and loyalty. Let clients experience value in exchange for their consent. Give them control over their own data. This will increase the amount of data you have, and with it the possibility to still create strategies at scale.

The Human Experience

These changes in the market may be very disruptive to your digital marketing efforts. If so, you might need to shift your focus to the human experience, helping your customers fulfil their needs while gaining their trust and, with it, their data—data you can then use within your own marketing technology and in those walled gardens we love to hate.

Our legal and digital experts have already helped many companies build a solid first-party data strategy. Are you interested? Please contact Nathan Struik for more information.