It doesn’t take leading a company to recognize that the advertising industry, and the broader market, are in uncertain territory. We all know that we may be in for a rough 2023.
In these trying times, marketers must discern the right tools for the job as the landscape shifts beneath them and continue to fine-tune their approaches to stay ahead.
The great marketing bake-off
When it comes to data-driven marketing, marketers can be like star bakers.
I say this because cakes tend to have three main ingredients: eggs, flour, and sugar. Similarly, data-driven marketing tends to rely on first-party, second-party, and third-party data.
Yet, just as one cake can taste heavenly with those three main ingredients, another can use the same ingredients and taste like cardboard. Marketers using data-driven marketing have the same potential to either help drive their companies forward or make some unfortunate mistakes.
In marketing, just as in baking, success comes down to finding the right mix — in this case, the right mix of first-, second-, and third-party data. While first-party data has been hogging the spotlight of late, second- and third-party data are crucial as well.
Like the best bakers know how to alter their recipe when the situation calls for it, star marketers should know how and when to alter their data mixes to discern the right insights and reach their target audiences.
The ingredient of the moment
Right now, many marketers’ ingredient of the moment is first-party data.
First-party data offers tremendous value to marketers and their companies. For those unfamiliar with it, first-party data is data your company’s customers provide themselves.
Customers share their first-party data in exchange for experiences that they value. Any time you help your customer get what they need, even if it’s as simple as answering a question they have, you are providing value for them. In turn, they might be more likely to share their information with you.
The value of data from your existing customers is twofold. First, it can make your existing customer relationships even stronger. It can also show you the type of consumer you may want to target for continued growth.
Giving your customers good experiences may encourage them to share more of their data. You can then use this data to create even better and more personalized experiences.
Finally, just as the best restaurants and bakeries set themselves apart with the quality of the ingredients that they use, the best data-driven marketers can set themselves apart in a similar manner. Having a strong first-party data strategy can help marketers maintain end-to-end control of this critical ingredient, and give them the ultimate confidence that consumers’ first-party data is top-notch.
When building campaigns, these marketers can rest assured that their ingredients — their data — are of the highest quality, since they’ve sourced it themselves. If their first-party data strategy is sound, they might not need to test the data further, or enrich it with data from other sources. They might also know how fresh their ingredients are — that is, how recent their data is. Recent and relevant data can often drive the best results, but even if first-party data is older, it can be enhanced with second- and third-party data to increase its effectiveness and drive better data-driven marketing.
What this all means
Many companies have already learned the value of first-party data for advertising. However, first-party data should benefit customer relationships at large.
As marketers increasingly adopt customer intelligence as a strategic discipline, brands are expecting more from their first-party data. The deep and engaging relationships established with customers in the process of building first-party data are tremendously valuable. Important customer relationships, in turn, become revenue drivers for marketing teams.
Additionally, first-party data can drive new revenue streams via data collaboration. Once first-party data is a core part of your company’s strategy, data collaboration — or the act of gathering and connecting data from various sources — may enable your company to enrich other companies’ data and help them gain new customer insights.
More importantly, data collaboration allows companies of all sizes to build customer intelligence in a way that respects consumer privacy. Retail media networks are a hot topic, as they create powerful new revenue streams for the companies behind them. Data collaboration makes retail media networks possible, and drives billions of dollars each year for today’s leading players.
The critical moment
Marketers across the world should remember to balance their marketing mix and tailor it to the moment to stay ahead in this shifting landscape. While first-party data is a popular ingredient, and for good reason, marketers would do well to remember the other ingredients they need for building reliable data — like a trusted, transparent value exchange. These value exchanges ensure that consumers feel in control of their data and understand what it might be used for, and are actively offering their data in exchange for something of value from your company.
In my next article, I’ll dive deeper into these value exchanges, and how they fit into the ever-shifting market.
The views and opinions contained in this op-ed represent the views and opinions of the authors and do not represent the views or opinions of The Current nor of The Trade Desk. The appearance of the op-ed on The Current does not constitute an endorsement by The Current or The Trade Desk of the content.