In the Era of Privacy go Deep on First-Party Data
We’re in the Era of Privacy where the protection and security of personal information is in the forefront of the news. Privacy issues and concerns about the protection and use of personal information, particularly in marketing, are at an all-time high. At the center of these concerns are personal data collected by companies that are then sold to advertisers directly or through platforms like Facebook. This “Third-Party” data collection and sharing is rarely transparent to the end-user whose data is being shared, and third-party data is being steadily removed or limited from use.
Take these examples of topics affecting privacy in the last year: 1) Facebook being hit by high-profile disconnects between their privacy policies and actions has erupted concerns at every level and has already resulted in both heavy fines to Facebook and a loss of audience targeting options in the Facebook ad platform.
2) European GDPR policies upping the ante for getting public opt-in on the use of cookie-based tracking, as well as regulation of the storage, protection and individual rights regarding personal information acquired by companies.
3) California, Canada and others are following suit by restricting the use of personal data for audience targeting.
4) The exposure of personal information through the hacking of Experian and other data aggregators has helped create the public perception that personal data is not well-protected by corporations and marketers.
The good news is that there are real alternatives to aggregated third-party data and in most cases the alternatives may be better for the optimizing of digital campaigns. These lie in a deeper investment in first-party data.
First, some definitions:
First-Party Data – This is behavior, action, or interest data that you gather from visitors to your web sites or apps. This includes data provided to you by your customers that lives in your CRM or other customer database and can include personal, subscription, survey, or social information measured directly by you or given to you by your customer.
Third-Party Data – This is data that you acquire from an outside source that was not gathered by you our given to you directly from the consumer. Many companies gather information specifically for sale to others (Experian for personal financial data is an example); while others may sell customer information they already have as an additional revenue source (many credit card companies do this). This is the type of data that is increasingly under scrutiny for the reason that the consumer has no control over the spread or use of their information.
At Working Planet we have never purchased third-party data directly. We have taken advantage of it indirectly through ad networks, such as Facebook, that combine third-party data with their own first-party data to extend targeting options (eg. financial, demographic, and other information based on third party data known to Facebook and not the advertiser It is only through the reduction of targeting options in Facebook following the Cambridge Analytica scandal that we have insight into the extensive use of third-party data at Facebook.
One of the reasons we rely less on third-party data is that first-party data holds greater value. What individuals do on a website is extremely valuable in optimizing to financial outcomes, and this first-party data gives you the control on this optimization while allowing you to uphold privacy and security commitments to your customers and site visitors. Some examples of valuable first-party data and uses: Multi-touchpoint tracking: A detailed understanding of the history of your customer interaction with your site gives you the ability to use that data to understand audience value. In our world, this gives us the levers to segment audiences and understand what to pay for them in the digital auctions.
Pre-sale email collection: Almost any company, regardless of business model, can benefit from capturing email addresses whether through gated forms, newsletter signups, demo requests, or webinars. Nurturing contacts through email newsletters and other outreach, as well as using email addresses to create AI-driven similar audiences, are standard uses of this valuable first-party data.
Customer financial data: While advertising often focuses on the top of the funnel, don’t ignore your customer data as a valuable source of insight for optimizing marketing campaigns. In addition to profitability of sales and deep financial data, customer data can also be used to create customer persona profiles, audience segment descriptions, as well as other segmentation valuable for optimization of digital campaigns.
Caveats on data storage and privacy, particularly for GDPR:
In this new era of privacy, there are commitments to consumers we must honor in order to be reputable brands in the modern world. Advertisers need to make sure that their privacy, cookie, and data use policies are up to date and in compliance with GDPR-level laws. Theoretically, European GDPR laws cover European consumers, not web sites, and while this has not been legally upheld, non-European web sites serving European customers are intended to abide by these standards.
If you sell consumer data or share it with others, what and how data is being shared needs to be disclosed to consumers. The laws surrounding this compliance are evolving quickly, so it is also necessary to be aware of these changes and respond accordingly. Our view is that the loss of third-party data is in no way the end of the world. The opportunities to improve performance using first-party data outweigh the loss of third-party data. There has been a lot of hand-wringing by advertisers about the loss or restriction on third-party data, but we think a world where users can control their personal data and where advertisers can target and optimize efficiently is possible.