How has the regulatory landscape affected the digital advertising industry?
Pretty much every call I’m on now is about the impact of operating system and browser changes. While tech giants like Apple and Google are reviewing and changing how advertisers can operate within their platforms, the future of first-party data is much more assured. First-party data owned by publishers or brands is the most valuable information they possess. It helps them understand who their most profitable customers are and how to find new ones that are similar.
Yet, to make use of this knowledge they must work with partners that provide software, connectivity and services to help them achieve superior marketing outcomes. A lot has already changed in just the last three years and that is only going to continue.
Amid the rapid rise of omnichannel, how vital is first-party data to accelerating growth?
Using first-party data for key marketing functions can boost revenue by up to 2.9 times and increase cost savings by 50%. Ironically, the research highlighting these omnichannel benefits was conducted by Google, a data giant which promotes closed environments.
First-party data also includes a lot of important omnichannel components that you don’t get from traditional digital activation, like discounts and loyalty schemes. Tesco, for example, is able to combine data in its loyalty cards with digital activation, providing a much more robust picture of the overall customer journey and an ability to find new audiences.
When you stick with a single channel and digital approach, you’re generally hitting the same audiences time and again, resulting in customer fatigue and the loss of profitability. Even if that’s part of your strategy, eventually you need to find new audiences. The more offline and online channels you connect, the better, and most of that is driven by first-party data.
The potential benefits from first-party data are clearly attractive, but why are marketers and media owners struggling to derive optimal value at present? The simple answer is it’s hard. Especially if you’re pulling data from multiple channels, it’s difficult to collate it all. It’s one thing to collect first-party data, but how do you activate it?
Not every channel speaks the same language. First-party data is extremely rich, you can understand your consumers in ways you couldn’t before, but it doesn’t show the whole customer journey. You only have the data that you have. However, if you’re able to link your data across the inventory other companies own as well as enrich it with a data partnership, you can start getting deeper insights into your customers and eventually other audiences, too. Unlocking the real value of first-party data relies on data partnerships.
Which sectors are leading the way in the first-party data movement?
Not too surprisingly, retail media has been a big growth area. We’ve certainly seen that retailers have been the most open to first-party data strategies and to realising their strength. I’ve already mentioned that Tesco has an open mentality, but we’ve also seen Asda working directly with brands as a publisher to increase sales. Boots, meanwhile, is using data to launch its own media business. I expect other industries to follow.
Finance and travel companies see huge online visitor numbers and can offer a range of incentives through the purchase journey; there’s a lot they have to offer relevant brand advertisers.
Are we now officially in the age of first-party data?
That’s certainly the direction of travel, but we have a long way to go. There are a few hurdles we need to get past first. First, news around user privacy can worry marketers so we need more education that, actually, sharing first-party data must be done in a responsible manner.
The economic environment has also been a barrier. When budgets are reduced, marketers tend to focus on reaching more niche audiences through the channels they are most familiar with, which means relying on third-party addressable inventory. But as they see the omnichannel rewards of first-party data inventory – which frankly is also more cost-effective – that’ll gradually change.
As marketers move outside closed digital environments to an open internet, they’ll build a better understanding of the customer journey across different publisher properties. Meanwhile, publishers will find that as their inventory becomes less addressable through third-party cookies, they will see fewer buys on their sites. These realisations will drive momentum toward responsible addressable media identifiers.
How is Criteo helpingto maximise the value of first-party data in advertising strategies?
Criteo has been helping marketers and media owners drive outcomes and solutions for their business for years, but we’ve now taken it a step further by launching our global commerce media platform, underpinned by large-scale commerce data and commerce-focused AI. Over 22,000 marketers are spending within this platform today and we are seeing over 685 million unique users on a daily basis, across 3,500 different categories.
All of this is culminating in a massive amount of data and, ultimately, creating a data partnership that everybody can take part in. It almost becomes a first-party data marketplace. All key parts of the advertising ecosystem – consumers and the brands and media sources they love – will benefit from the open web, and our platform ensures they’ll all get the value they deserve.
For more information, visit
criteo.com/future
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