Currently, personalisation is no longer a novelty; it’s an expectation. A staggering 80% of consumers are more inclined to purchase from a brand offering personalised experiences. Indeed, the need for hyper-personalisation was a recurring theme at this year’s TFM conference.
However, we marketers know that times are changing, especially with Chrome’s impending plans to phase out third-party cookies. But we said it once and we’ll say it again: change presents a hidden opportunity for innovators to thrive. If you are one of those innovators, keep reading to find out how to keep up with the ever-increasing need for personalised experiences in a cookieless world.
The sunsetting of third-party cookies
Our Cookie Apocalypse Survival Guide thoroughly explains the reasons for the sunsetting of cookies.
But in short: amid rising privacy concerns and regulations, Google, which holds over 60% of the browser market, announced the complete phase-out of third-party cookies by the second half of 2024. Even more, Google’s decision not to pivot towards alternate individual tracking and its emphasis on first-party data is both significant and indicative. Such changes might threaten smaller organisations without consolidated first-party data repositories. So, in this article, we’ll explore all the possible options to harness the power of the data that you have and how to move forward towards a solid first-party data strategy.
But first, let’s examine all the types of data marketing teams use in their campaigns.
What are the 4 types of data?
Before you embark on re-evaluating your use of data in your marketing strategy, it’s crucial to understand the four types of it.
|Type of data
|What is it?
|How can I collect it?
|What can it tell me?
|Also known as declarative data, it’s the information that consumers willingly share with brands, often for a personalised experience or other value exchange.
|Information collected directly by an organisation from its audience without intermediaries, typically from interactions with its products, services, or digital platforms, across all its touchpoints.
|Information that an organisation acquires directly from another organisation through partnership or a one-off purchase, where the data was originally collected as first-party data by the latter.
|Information collected by entities that don’t have a direct relationship with the user but source and aggregate it from various external platforms and providers.
What are the problems with third-party data?
At first glance, it might seem like third-party data is the gold mine of all the insights you could possibly gather on consumers. And for the longest time, it really was. According to Marketing Dive, 53% of digital marketing campaigns still rely on such information. However, that doesn’t mean that it’s of higher quality or more effective in driving marketing performance than its first-party counterpart – it’s just easier to access and collate through third-party tracking.
In reality, it has some real shortcomings marketers are just now waking up to. Consider these:
Lack of control over data quality or accuracy can result in unreliable strategies
Third-party data often originates from myriad sources and undergoes several layers of aggregation before reaching the end-user. Because of this, marketing professionals don’t have direct oversight of the data collection process. The implications are clear: the data might be outdated, might have undergone multiple interpretations, or could even be entirely incorrect.
The absence of context makes effective utilisation challenging
One of the most underrated elements of data is its context. Knowing where, how, and why a piece of data was collected can often be as crucial as the data itself. With third-party data, marketers often receive vast amounts of information without a clear understanding of its origin or the circumstances of its collection. Thus, deciphering or tailoring marketing strategies to meet specific customer needs becomes akin to shooting in the dark.
Overlapping strategies due to shared data vendors limits differentiation
Many companies might be purchasing data from the same third-party vendors. This poses a clear and imminent problem: if Company A and Company B both target similar audience segments and are acting on the same data insights, their strategies might mirror each other. Not only does this dilute the uniqueness of their campaigns, but it also increases competition for the same audience slice, potentially driving up costs and diminishing returns.
Quick expiry of data relevance will always place you one step behind
In today’s fast-paced digital world, consumer preferences, behaviours, and circumstances change at lightning speed. Data that was relevant a month ago might be obsolete today. Third-party data, because of its layered aggregation and distribution process, is particularly vulnerable to these rapid changes. By the time it reaches the end-user, it might no longer align with the current market dynamics.
Your risk violating privacy laws
Third-party data, given its removed nature, might not always adhere to the latest privacy regulations. Using non-compliant data not only risks alienating potential customers but also opens businesses up to hefty fines and reputational damage. Moreover, with rising consumer awareness, trust in brands that use such data without explicit permissions can erode, affecting customer loyalty and engagement. After all, a PMW survey reveals that 75% of consumers don’t trust brands with poor data ethics.
Considering all these factors, the sunsetting of third-party cookies might be more beneficial than we initially thought. Now, marketing strategies are pivoting towards first-party data in their effort to drive increased personalisation.
What is first-party data and how do you use it?
As stated above, first-party data is the information that businesses collect directly from their customers, visitors, or users without intermediaries across their omnichannel ecosystem.
The inherent benefits of first-party data lie in its precision and relevance. Unlike third-party data, it’s garnered firsthand and offers unparalleled accuracy and immediacy. This gives a clearer, unfiltered view of your customers’ preferences, behaviours, and desires.
Sourcing first-party data
From the moment a user lands on your website to the post-purchase phase, every interaction offers valuable information that can feed into business decisions, from marketing operations to product development.
To capture these interactions, you’ll need to use first-party cookies, which are generally considered completely harmless if implemented with the user’s consent. These track people’s behaviour on your website, such as pages visited, time spent on each page, items added to a shopping cart, and conversion events. All this data can be collated into a CRM like Zoho or Hubspot, or a CDP like Twilio or Oracle Unity.
Other untapped sources of data your organisation might already possess are:
- Mobile web and apps: Not only can users’ behaviour on mobile platforms offer a more intimate view of their habits, but they’re also more likely to share personal information like names, dates or birth and contact details for log-in purposes.
- Subscription data: Those who subscribe to newsletters or other forms of content demonstrate a higher level of interest in the brand, making this data particularly valuable. Details such as which content they engage with or ignore can inform content strategies.
- Email and SMS: Beyond just open rates, tracking which links are clicked, the times of engagement, and even the devices used can offer granular insights into user behaviour.
- Call centres: Often overlooked, call centre data is a gold mine. Complaints, suggestions, or even general queries can shed light on areas of improvement, and positive feedback can guide best practices. Or, as Bill Gates put it in his book, “Your most unhappy customers are your biggest source of learning”
- Social media interactions: Followers’ likes, shares, comments, and direct messages can be a rich source of qualitative data, giving a sense of audience sentiment and areas of interest or concern.
- Surveys and customer feedback: Direct feedback from customers is an invaluable source of first-party data that can provide insights into areas needing improvement or innovation.
Using first-party cookies doesn’t guarantee compliance!
Using first-party data doesn’t automatically ensure ethical or legal compliance – it must still align with regulations like the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the US. These require clear consent, transparency about data usage, and the provision for users to opt-out or request data deletion.
Data security practices and encryption methods
And speaking of compliance, in the era of heightened data sensitivity, securing your first-party data is paramount. Here’s a glimpse into the security practices and encryption methods that safeguard your valuable customer insights:
- Utilise industry-standard encryption protocols such as SSL/TLS to protect data during transit.
- Implement end-to-end encryption to safeguard data at rest, ensuring it remains confidential and intact.
- Employ stringent access controls to limit data access only to authorised personnel.
- Utilise multi-factor authentication to add an extra layer of security, ensuring that even if credentials are compromised, unauthorised access remains thwarted.
- Conduct routine security audits to identify vulnerabilities and address them promptly.
- Regularly update security protocols to stay ahead of evolving threats and maintain data integrity.
- Employ data masking techniques to conceal sensitive information, allowing only authorised personnel to view complete datasets.This adds an additional layer of protection against internal threats or unintentional data exposure.
Remember, your customers trust you with their data; make sure your security practices reflect that trust. Now, onto the fun part – personalisation!
How to personalise communication through first-party data
At this point, you might be wondering: how do I provide my customers with personalised communication? The first thing you need to know is that, at its core, this strategy follows a three-stage process:
- Segmentation: This involves classifying the audience into distinct groups based on various factors such as socio-demographic details, psychographic inclinations, behaviours, preferred communication channels, the context in which they interact with the brand, and the consents they’ve provided.
- Personalisation: Here, the focus is on creating a range of content variables tailored to each segment. This ensures that each audience group receives exactly what matches their preferences and behaviours.
- Individualisation: At this stage, the richness of the first-party dataset is leveraged to craft messages fine-tuned to individual users. It’s an in-depth, granular approach that goes beyond general audience characteristics. Having a robust dataset is key to creating accurate customer profiles.
Apteco, an industry-leading first-party data collection tool that offers omnichannel insights into your target audience, delivered an insightful talk at the TFM conference. In it, they defined the following maturity levels of strategies reliant on first-party audience data:
- Basic: This level involves sending rudimentary communications based on basic contact information. However, this approach could lead to missteps that might have the adverse effect of pushing customers away (like accidentally offering a discount on beef products to a vegetarian), resulting in potential brand damage.
- Intermediate: Communications at this level offer “safe” messages to a large audience segment. Keeping up with the beef allegory from before, this time let’s say Hypothetical Grocery Retailer instead offers a generic discount redeemable against any product category. While more nuanced, this might still not offer a compelling enough distinction for consumers to opt for this product over the competitors’.
- Advanced: This is where sophisticated derived variables and predictive analytics come into play, pushing the envelope on personalisation. For example, based on your customer purchase history, you can segment them so that they are offered regular discounts on their most purchased items or are made aware of other similar products that might pique their interests.
As you can see, data derivations play a pivotal role in refining this communication. Derived from raw datasets, these offer analytical insights and aid in message individualisation. Even a limited amount of CRM data can blossom into hundreds of useful derivations. For instance:
- An individual’s address can be used to pinpoint their nearest store, enabling the sending of location-specific offers.
- A birthday can facilitate categorising them into an age bracket, leading to age-appropriate messaging.
- RFM (recency, frequency, monetary) data can guide communications about the availability or offers on a consumer’s favourite products, suggestions on similar items, or recommendations based on their purchasing history.
These are just a few examples of what a first-party data-driven marketing can do. With the right tools (like the aforementioned Apteco), you can unlock hundreds of variables from a small amount of CRM data.
All these sound good in theory, but let’s see how they look in practice.
Barclaycard Business Solutions: Pioneering content-driven personalisation
In the competitive landscape of B2B marketing, Barclaycard Business Solutions stands out as a stellar example of a company that has transitioned from a product-centric to a content-centric approach. This strategic pivot has positioned them as a “brand publisher,” demonstrating the power of first-party data in driving personalised experiences. They did so by:
- Utilising first-party data for informational content: The company taps into a rich source of first-party data to generate content that deeply resonates with its business audience. This involves understanding customer needs and preferences to craft and distribute a diverse range of informational content.
- Beyond promotion to meet buyer needs: The company’s approach extends beyond traditional promotion by specifically addressing the informational requirements of its audience. This strategic focus not only enhances customer engagement but also establishes Barclaycard as a thought leader in their industry.
- Personalising user experience through first-party data: Leveraging first-party data enables the company to create more targeted and relevant user experiences. This approach goes beyond selling a product; it aims to provide value, build trust, and nurture long-term relationships with customers.
Pure Storage: Leveraging content for data-driven results
Pure Storage provides a compelling case of how B2B businesses can utilise first-party data to enhance their marketing efforts. Their methodical approach to content and data management has yielded significant improvements in conversion rates and sales alignment. These are some things they had to consider:
- Content relevance at scale: By producing and tagging content strategically, Pure Storage makes it machine-readable, enabling them to effectively categorise and utilise their first-party data.
- CRM and marketing automation integration: Logging interactions with their content into CRM and marketing automation tools, Pure Storage captures valuable insights about customer interests and behavior.
- Actionable insights for better performance: This data is then actioned to improve B2B performance, resulting in better conversion rates, faster deal closure, and enhanced alignment between marketing and sales efforts. Their use of first-party data is a testament to the power of personalised content in driving business growth.
Conclusion: Driving hyper-personalised experiences in a cookieless world
The digital landscape is evolving, with third-party cookies becoming a relic of the past. As marketers, it’s our responsibility to adapt, innovate, and chart a new course. The future belongs to those who can effectively harness first-party data and provide personalised experiences in an increasingly cookieless environment.
At Dusted, we always have one eye on the future of marketing.
We work with some of the most ambitious and game-changing businesses in the world and deliver solutions that walk the fine line between human connection and technical innovation.
As a specialist brand activation and digital marketing consultancy, we offer a plethora of resources to help you hone your strategies wherever you are on the adoption curve, helping diverse teams implement change that delivers actual results.
If you want to dive deeper into marketing and brand-related topics, make sure to check out these articles:
- Our key insights from Technology for Marketing 2023
- Benefits of MarTech in your B2B digital marketing strategies
- How to craft a winning content strategy for the web
And if you require expert help and guidance tailored to your business’s needs, don’t hesitate to reach out. Get in touch now to book a call!