By: Trent Lloyd, Co-founder and Head of Brand Solutions, Eyeota
There’s a lot of uncertainty swirling around the media industry right now, so let’s dispel at least one alarming bit of confusion: third-party cookies and third-party data are not one and the same. To treat them as the same thing is to fundamentally cripple your marketing strategy going forward.
The global data-driven marketing landscape is in a state of upheaval around audience identifiers, and to be clear, a lot of targeting mechanisms that advertisers take for granted—including third-party cookies—are going away.
However, even as industry conversations deepen their emphasis on the power of first-party assets in a privacy-first world, third-party data will remain an essential component of successful campaigns and communications.
Let’s dig deeper into the distinctions that global marketers need to understand during this period of transition.
The ‘third-party’ confusion
In recent months, I’ve been repeatedly confronted at industry events by a prevailing confusion regarding third-party cookies and third-party data. That is, they are often presented or spoken of in the same breath, with the implication being that the imminent death of third-party cookies will result in the death of third-party data.
This is simply untrue. There are myriad methods by which data from multiple sources is collected, defined, aggregated and made available to the marketplace for enrichment, onboarding and targeting—methods that are not dependent upon a third-party cookie.
Why the confusion? Yes, a huge part of it is Google’s imminent deprecation of third-party cookies and the fact that other browsers have already eliminated support for these once-relied-upon trackers.
But most certainly, part of it also comes from the growing regulatory pressures on consumer data acquisition and usage—pressures embodied by the Australian Privacy Act review, which seeks to more stringently police consumer data policies in the region.
The government released draft amendments with a discussion paper in late October, with the stated goal of bringing the Australian Privacy Act more in line with GDPR, which—among other things—closely regulates how personal data is handled by third parties.
One problem is that, in discussing the move toward more stringent privacy policies, people have begun painting with overly broad brushes. The common narrative has become this: first-party data is good. Third-party data is bad. But that’s not just an oversimplification. It’s downright incorrect.
The incomplete solution of first-party data
There’s no doubt that first-party data—information a company collects directly from its customers and owns—is valuable, desirable and less prone to challenges that can arise when data is transferred from party to party. However, the suggestion that first-party data is sufficient as a means of customer retention and acquisition is wholly misguided, and regulations that seek to shut down the third-party exchange of data are actually just concentrating more power in the hands of a very few select companies.
In most markets, the vast majority of brands simply do not have enough scale and quality (i.e., traits or attributes per customer) to execute a meaningful data strategy without making use of other sources of data for enrichment, augmentation and scale of delivery. The exceptions are massive retailers, telcos and tech giants like Facebook and Google, which have a disproportionate amount of consumer insights and attributes housed within their own walls.
The other 95+ percent of companies will still require privacy-compliant access to third-party data in order to connect with their customers and prospects in a meaningful way. In a cookieless future, that means aligning their data strategies around the following two approaches, while remaining ID-agnostic in order to ensure flexibility for the future:
Firstly, data onboarding, which uses privacy-safe third-party data to transform marketers’ first-party data assets into powerful digital audiences to reach new customers, enhance marketing analytics, deepen insights and boost omnichannel campaign performance.
Secondly, data enrichment, which enables brands to model and enhance their first-party data assets with qualified third-party data for insights, personalization and targeting.
And finally, data expansion, through which brands with a rich seed of first-party data can expand reach by using a look-a-like product.
As an industry, let’s do ourselves a favour and stop creating confusion where none needs to exist. The future of advertising might start with first-party data, but it’s still going to be underpinned and propelled forward by privacy-compliant third-party assets—ones that have nothing to do with the much-derided and soon-to-be-defunct third-party cookie. Only by shoring up proper third-party data strategies now can brands ensure they’re prepared when third-party cookies vanish altogether.
This article was first published by Mumbrella.
