Have you joined the party yet? We’re talking about 2nd-party data, and if you haven’t…
With data-driven marketers relying more on programmatic ad buying solutions, they are coming into contact with complex analytics reports that they need to decipher in order to improve their marketing strategy.
But in order to be truly successful, marketers first need to make sure whether they understand the role data plays in the success of their efforts.
Most of automated media buying’s brief history has been built on third-party data, which is generated from consumers’ interactions on various websites. This type of information can be accessed through various means, but it is also sold by vendors.
Third-party data is turned into audience packs based on users’ online activities. Vendors also create packages according to their client’s advertising needs. But since marketers are often pressed for time, they end up buying the same audience packs as their competitors, which is a poor recipe for long-term success.
Marketers should step back and look at the big picture. They need to ask themselves how third-party data helps their organization achieve its larger strategic goals. Buying audience packs may make sense in itself, but a more serious focus on strategy will result in more custom-built third-party audiences, better decisions on using these pieces of information, and improved performance when it’s time to execute.
If the need to focus more on strategy is important in using third-party data, it’s paramount when it comes to first-party data, which the advertiser owns. This group of information includes behaviors, actions, or interests shared by your visitors on your websites, on-board CRM data, or geolocation data from mobile devices. This kind of data is not only unique but also potentially the advertiser’s most valuable asset.
Unfortunately, it’s all too common to hear marketers talk about first-party data as the bread and butter of digital advertising. That shouldn’t be a surprise. First-party data is often expected to be the last piece of the puzzle when driving purchases. But as with third-party data, there’s a bigger picture here.
The audience information that the advertiser owns plays a valuable role in crafting strategies because it’s often one of the best resources for understanding potential customers. Thinking strategically about customers means using first-party data to view them with the widest lens—how they can interact with you online on social media, mobile, and offline.
In this way, you’re not only optimizing at the point of a potential sale but also seeing your customers for more than just what they’re buying. As a marketer, you can use this information to build highly customized (and therefore more effective) digital advertising plans.
The latest trend is to leverage more first-party data sources by connecting business partners from different industries with a similar type of audience.
For example, an audience from an airline company could be complementary to an audience of a credit card lender or a hotel chain. Direct partnerships between these players could create more cost-effective deals with unique insights. The main challenge, though, is to identify enough of these like-minded second-party partners who would be willing to do business together. But in theory, the potential is huge.
Marketers who use data to its maximum strategic effect don’t just reap the benefits of more precise audiences. They expand their understanding of consumer behavior and how the company’s products are perceived in the marketplace. The more strategically marketers think about the first-party data they own, the third-party data they choose to buy, or the second-party data they trade, the more their audiences will tell them what they think of the company’s current offers and what they want from the company in the future.
While that kind of information can certainly have a positive impact on sales, the far greater benefit is that the marketing department will be so closely aligned with the market that it can help make significant contributions to the company’s future growth.