First Party Data....Is it Really the "Best Stuff?"
Written by: Stefanie Beach - Founder & CEO SMB Media Consulting
It's no secret that 1st party data is the most valuable asset. I am sure we have all heard "data is king!” So why is it that so few actually utilize it? First party data is all of the data points collected about specific users/consumers/visitors. A combination of all those data points and sources can and should be used to inform a company's understanding of who their existing customers are and how to attract new ones.
Using a DMP (data management platform), data assets can be used to profile a brand, categorize buyers by interest and inform the selection of audiences. Through profiling, marketers learn more about who their users are, what they purchase, their interests, content visited and more. While this may scare consumers who aren't familiar with our industry and listen to mass media news, it really is harmless and keeps all personal information private. Data collection and use can seem creepy when you think about it. Even explaining digital data collection and PII (personal identifiable information) to my husband, he is still freaked out that he can be tracked, categorized and targeted digitally. It truly is just an aggregation of a user’s digital interest and behavior; the user is just a string of random numbers. However, data capture and targeting is also beneficial for the user as well. It allows for a better user experience. When digital marketers have a better understanding of who you as a digital user/consumer, it brings forth a more relevant and customized experience. If you have to see ads, wouldn't you rather they relate to you and your interests? I know I would.
When making the investment in display advertising campaigns, it’s important to ensure you’re getting the most out of your budget. Many companies have been adopting a data driven or data first strategy more and more over recent years. Ensuring they are taking advantage of all available intelligence and information about their audience seems to be key. By doing this, not only do they better know their users, but they can also determine how to most efficiently and effectively reach them, learn new things about them and possibly relate to them in other capacities. It will be interesting to see how GDPR affects the way we capture and use data. But in all reality, I am sure it will just drive the need, want, desire and cost of data targeting up and make it that much more relevant and valuable.
Some of the most common types of segmentation for advertising targeting purposes are:
· Purchase base - decision-making influenced by the presence of pervious transactional/purchasing behavior/data.
· In-market - insights that demonstrate a consumer is actively looking to purchase a specific item.
· Demographic - social and economic info about populations including age, gender, income, education, type of residence, etc.
· Geographic - insights in relation to the location and attributes of a designated area.
· Behavioral - Observable actions and patterns of a particular individual or group based on their digital footprint.
· Psychographic - An aggregation of values, interests and lifestyle information to create a profile for an individual or group with similar traits and beliefs.
This information is extremely important to companies to understand who their users/customers are so they can keep them coming back. The goal for any business is to generate revenue, make money and be successful. So consider this: if you were a car dealership, wouldn’t it be great to target/advertise to users that you know are in the market for a new car within 25 miles of your dealership? Wouldn't it wonderful to have specific messaging for people who are already considering a specific car type? See how this data and information can be so powerful?
However, I do think this all needs to be handled with finesse and a well thought out strategy. Typically, a company has other assets that they can use in conjunction with their first party data. Not only can you leverage and access 2nd party data, 3rd party data and look-a-like models, but you can leverage other internal information to really take your strategy to the next level, like recent purchases and target those users with an upsell opportunity or a discount/free shipping on their next purchase. Or what about site page data? It can inform you on other ways to target your users, other products they may be interested in, etc.
Another consideration should also be the consumer/user themself. Think about what it is like being a consumer yourself. What makes your experience more pleasurable or what annoys you? Isn't it the worst when you've already made a purchase, but are still seeing ads that something was left in your cart? Or when you haven't been to the site in months, but you are still being targeted for those jeans that you once looked at. This all gets overlooked very often, yet implementing a frequency cap, utilizing purchase data, dynamic creative, retargeting, etc. are all things that can easily remedy these issues and make a more pleasurable experience. Start with the whole picture but don’t overlook the details. The small stuff matters too.
I know we are "super users" and are more aware of ads and retargeting, etc., but take notice. Is there something that makes you think or catches your eye? Use that as a tool and try something new or different. It may just work, and if it doesn't at least you know. There is so much more that should be considered beyond just who and what type of targeting makes sense. Those that have figured this out are thriving and those that haven't are making monthly donations to an expensive DMP.
Stefanie is the founder and CEO of SMB Media Consulting. Being in digital advertising since 2006 and working on the buy and sell side of the business has given her a unique approach to clients business. She lives in the Bronx with her wonderful husband Nick and 6 year old daughter Audrey.