In a new era for digital advertisers, first party data will be crucial in the ability to speak to customers and measure their interactions with them.
Much has been made over the last two years about the impact on advertisers when Google’s Chrome browser completely restricts access to third party cookies by the end of Q3 2024. Unsurprisingly, the focus has seemingly been on what this means for advertisers in how they will be able to continue to show their ads to the intended target audience with a minimum amount of wastage.
While first party data (that is, data that comes directly from interactions with customers or users) will be hugely valuable in solving some of these challenges, there will also be other strategies which may be able to generate results comparable with what they are already able to achieve today, such as contextual targeting and machine learning based models.
There has been less focus on what this means for advertisers in terms of actual advertising performance measurement. Brands relying today on outdated pixel or tags from third party vendors are likely to be completely exposed to the death of the third party cookie, as almost all of their advertising will occur in browsers and environments that no longer allow access to these. This means a complete black hole in terms of conversion/purchase based metrics, as well as almost no visibility of reach and frequency numbers, creating a perfect storm for budgets to be wasted in areas that simply don’t perform.
The only durable and long term solution to this will be utilizing a combination of first party data obtained from tech providers with unique access to this kind of data (think Amazon with its retail data, or Meta with their interest based data) and an advertiser’s own first party data that they are able to collect and then leverage directly with such a provider, or aggregated first via a Customer Data Platform (CDP) and then distributed from their out to their digital partners.
First party data has a number of strengths for advertisers:
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Accuracy and Reliability: First-party data comes directly from interactions with customers or users. This makes it highly accurate and reliable since it's based on actual behaviors and preferences, rather than weak probabilistic signals or non-enduring browser cookies
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Granularity: It allows for granular insights into audience behavior. This means advertisers can understand their audience segments better and tailor their advertising strategies accordingly.
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Customization: With first-party data, advertisers can personalize their campaigns to a much greater extent. This leads to more relevant ads being served to users, increasing the likelihood of conversion.
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Attribution Modelling: First-party data can provide insights into the entire customer journey, from initial interaction to conversion. This helps in better attribution modelling, understanding which touch points contribute most to the desired outcomes, rather than relying on guesswork through outdated third party cookie based methods such as last click.
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Long-term Value: Building a repository of first-party data over time creates a valuable asset for advertisers. They can use historical data to identify trends, forecast future outcomes, and optimize their advertising efforts more effectively.
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Compliance and Trust: Using first-party data ensures compliance with data privacy regulations since it's collected with user consent and held securely. This helps in building trust with customers, as they know their data is being handled responsibly.
Overall, leveraging first-party data for outcome measurement in digital advertising will at least initially provide a competitive advantage by enabling more precise targeting, better campaign optimization, and deeper insights into customer behavior than those left behind still holding on to obsolete technologies.