First-party data gives marketers far more control but needs careful management, says Tom Bianchi, EMEA CMO at Acquia…
It is an obvious statement to say that the more information brands hold about their customers, and the higher the quality of that information, the more accurate and relevant the marketing of products and services can be. In today’s digital world, it’s a safe bet that much of the customer insight utilised by marketers comes from third-party cookies. This has always, however, been something of a scattergun approach, as the science behind cookies is not very sophisticated.
Although third-party cookies can see which websites have been visited, and which products and services have been viewed, that’s where the insights stop. Cookies don’t know if an individual actually went on to buy anything. This shallow data is why continued advertisements for a product are served up to individuals after they have made the purchase. These adverts can persist for weeks, which is annoying, pointless, and potentially damaging to the brand in terms of perception.
Hiding in plain sight with the FLoC
The implementation of European GDPR and the rising tide of concern about privacy saw the introduction of user consent to store cookies, followed closely by some browsers blocking third-party cookies. It was all getting a bit counterproductive. So, taking the lead, Google announced that it would be phasing out support for third-party cookies, to be replaced by its Federated Learning of Cohorts (FLoC). This, Google says, “effectively hides individuals “in the crowd” and uses on-device processing to keep a person’s web history private on the browser.” This doesn’t look like an improvement on cookies in terms of quality of information, or sound very valuable to advertisers. It also does not enable personalisation in terms of serving relevant content to consumers. Are marketers being flipped from the cookie pan into the FLoC fire?
It certainly looks like it, from the industry reaction. Concerns have been expressed about the actual privacy of the FLoC model in terms of sharing data with advertisers, and whether it is in fact an effective replacement for third-party cookies. It is also not in Google’s own interests to create a better alternative – for while marketers won’t be able to see individuals’ preferences via FLoC, Google will, further strengthening its already dominant position in the online advertising space. In the face of mounting pressure from within the industry, Google announced earlier this year that it would be delaying the transition to FLoC until 2023, although it could still follow through with its plans once the proposals have been subjected to scrutiny by independent regulatory advisors.
Customer profiling needs revisiting
It would be contentious to suggest that relying on Google for marketing insights is the lazy option, but relying on third-party anything means there is no control if the services change. That’s what’s happening here. The information that cookies provide have been underpinning many a marketing strategy for decades. With that data source disappearing, and the negativity around FLoC unlikely to go away, marketers are going to have to look afresh at how they approach customer profiling.
Understanding how customers behave is critical to the success of any business. Customers who feel valued as individuals are more likely to be loyal to a brand. Those who feel like one of many in a conveyor belt world have no reason to be loyal. So, to build a picture of what customers want, what they like, how they purchase – what better than to actually ask them? Third-party data doesn’t have any direct interaction – there is no consent, it’s simply a dump of aggregated information providing a poor-quality approximation of a purchasing profile.
The way forward for brands who take customer experience seriously and care about loyalty is to discover the personal touch through first-party data. This is accurate, top-quality information about each customer that is gathered with their permission and consent, via any channel they use to interact with the brand. This data can be enhanced with zero-party data, where customers willingly give additional insights through touchpoints such as surveys, quizzes, downloading collateral, or other interactive content. This approach also demonstrates that the brand is trusted enough to be given this supplementary information.
With great data comes great responsibility
Taking control over customer data and giving back control to those customers as to the kind of information they are prepared to share, gives brands an immensely valuable marketing resource without depending on third-party input. It is critical though that this data is properly secured and managed to extract the full potential for personalisation. A powerful data platform will standardise and enhance the information to provide a clearly defined purchasing profile for each individual who interacts with the brand. And – crucially – each of those individuals will have given permission for the data generated by those interactions to be collected and stored.
While marketers have had years of relying on third-party cookies, the range of channels and touchpoints through which customers can interact with a brand is today so much greater than a website. Brands which can collect, own and control all the information provided via those touchpoints, and which have the capability to store, manage, analyse and act on the insights, will leverage the quality and reap the benefits of consent-driven marketing.
By Tom Bianchi