by Adam Solomon, Chief Growth Officer, Lotame
Despite rumors to the contrary, marketers and agencies want and need a connected ecosystem. In order to get there, savvy, growth-oriented publishers and media companies would be wise to embrace all data brought to the party.
First-Party Data Is Superman But Even Superman Needs Help Once in a While
No one denies the power of first-party data. It has incredible value to publishers and marketers, and for good reason. First-party data was freely given by consumers to the sites and apps they love. I read a regional newspaper regularly and I happily log into my subscription every day. Hell yes, I want them to know who I am and serve me more of the content I’m interested in. First-party data is fantastic. That’s the truth.
Like Superman, first-party data has its kryptonite. In the latter’s case, it’s scale. Marketers need scale to optimize their ad spend — and their media team’s resources in buying high-quality inventory. In a connected ecosystem, what provides scale for marketers is the ability to add third-party audiences.
You’ve seen the click-bait headlines that “Third-Party Data Is Dead.” It couldn’t be further from the truth for marketers and agencies who rely on these quality data sources to reach more relevant audiences everywhere they are. If you don’t believe me, check out Winterberry Group’s growth in data spending forecast for 2020. Data and data services are projected to rise to $23 billion in the U.S. To put that number in context, data spend in the U.S. is roughly equivalent to the GDP of Iceland. (Yes, this was pre-pandemic but we’ve seen only a moderate slowdown in data purchases.)
Third-party data is the connective tissue everyone needs. If my newspaper wants to enrich its valuable first-party data, it can with third-party attributes and behaviors. Not only would that property learn more about its customers (ahem, me) but with the right tools, they’d be able to package and pass those attributes and behaviors to the marketers that want to buy them. Go ahead and land that CPG or Auto brand with your data-driven audiences. Publisher grows revenue by maximizing inventory. Marketer connects with new audiences. Consumers discover products or services they didn’t know they needed.
Not all third-party data is sourced or aggregated equally, however. What I’ve described above is an ideal scenario in which the quality of the data provider has been vetted and verified. It’s not a fantasy though. These data enrichment use cases are happening right now, around the world. Reputable third-party data providers like Experian and MasterCard, for example, are transparent about provenance, collection, accuracy, and usage. Which is why, marketers and agencies can’t get enough of third-party data to learn more about their customers and create addressable audiences that actually work.
There will always be bad actors, and third-party data is not exempt. But to dismiss the power of third-party data as a whole to marketers and publishers is not only nearsighted, it’s downright blind.
Browsers Are Party Crashers and Not the Fun Kind
Browsers have overstepped and broken customer relationships with cookie blocking. They are effectively crashing a party they weren’t invited to and trying to take over the music and bounce the door.
Consider that in the U.S. Safari and Firefox account for 38% of market share. Thanks to cookie blocking, marketers cannot reach more than a third of customers and prospects. Those touchpoints are gone. Further, publishers are losing out on 38% of monetization opportunities. Does that seem fair? Marketers and publishers were not part of the conversation about their ecosystem, about their economy, about the free Internet that they support. Safari and Firefox made these decisions to serve their own needs and to disconnect marketers from consumers, although I’m sure they’d be loathe to admit it. At least Google puts on a public face that the industry will be part of a solution, although the jury is out on how much weight or voice they’ll have.
Is it the responsibility of Safari, Firefox, and Chrome to persist consumer privacy choices? Or rather, is it the right thing for publishers and media companies to protect their users and honor their choices? I suppose you could argue both sides sufficiently, but I believe doing the right thing by consumers is giving them the choice and tools to interact with trusted brands on their own terms.
Consumers win on privacy, right? Not so fast. Remember who pays for the vast majority of free content online. Marketers. If publishers can’t monetize their content and marketers can’t reach their customers, you can expect some of your favorite niche sites and apps to close up shop. You can also look forward to more irrelevant ads as marketers try their best to reach the right audiences but hit and miss more often.
Lest you forget, third-party cookies and third-party data are not the same. What cookie blocking accomplishes is making it more challenging for marketers and publishers to connect data in web environments. Isolating your first-party data and refusing to collaborate is a dangerous way forward. As I’ve said previously, “Growing your business and helping your marketing partners succeed requires finding your consumers across many platforms and channels, understanding more about them, and engaging them in smart, respectful dialogue.” In other words, what will lift all boats is a connected ecosystem in which everyone can operate under the same guidelines and rules and identify consumers with translatable IDs while persisting privacy preferences.
Connectedness Is Human Nature
Connections couldn’t be more important at this point in history. We’re all experiencing a world in which our connections, near and far, are keeping us healthy, sane, and fulfilled as best as possible during the pandemic.
I see the light and it’s not at the end of the tunnel. I see a very near future where marketers, agencies, publishers and media companies will find new ways to connect with each other, see more about their customers, and have the tools to strengthen those relationships and grow their businesses.
“Disconnect” as an operating system is canceled. Let’s embrace the joy of connecting in meaningful and relevant ways. After all, everyone — even first-party data — can use some Super Friends now and again.
Call me optimistic but there’s so much that both sides of the table are missing right now, and Lotame is just the innovator to solve it.
How are marketers and publishers adjusting their customer acquisition strategies in light of nonstop industry change? We surveyed over 1,400 decision-makers to better understand identity’s role in their cookieless future, what they’re adding and removing from the next-gen tech stack, and where they plan to invest today and in the future. Get the report here.