Privacy Changes Don’t Have to Result in Signal Loss

Marketers have long relied heavily on third-party data. However, third-party data is going away due to privacy changes. And this has fed a narrative of signal loss in digital advertising that has often made it seem as if signal loss is the inevitable result of the data privacy movement.

But that’s not necessarily the case.

First, this shift is for a good reason — many, if not most, people are uncomfortable with their every move on the internet being monitored. Regulations like GDPR in Europe and CPRA in California as well as the end of third-party cookies and mobile identifiers will foster a more trustworthy digital environment for consumers.

Second, the diminishment of third-party data doesn’t mean brands won’t continue to enjoy a treasure trove of first-party data (and, via partnerships, second-party data). Most brands stand to extract a lot more value from this data, which is at their fingertips. They just need to fully capitalize on it.

Brands Could Extract More Value From First-Party Data

Improving your collection of first-party data can tell you a lot about who your customers are, how they discovered you, and how likely they are to become repeat purchasers. When analyzed systematically, first-party data tells the story of the entire customer journey, illuminating the multiple channels and events that led them to a purchase or another conversion on your site.

Who are your customers? How did they find you? What brings them back? What channel brings the most traffic to your website? Which brings in the highest-value customers? How long does the average customer wait between purchases? When aggregated, this type of information shows your marketing team exactly where they should be putting their spend and what kind of prospects they should focus on.

When we compare first- and third-party data, the former is far more accurate because it's deterministic, not aggregated or probabilistic. And more importantly, you own and have direct access to it. Despite this, first-party data has been undervalued by many marketers.

While many of us collect data points like email addresses and look at metrics like open rates, we don’t necessarily take the next step to dig into how those emails perform on a deeper level — e.g., timing these to coincide with the average days between orders made by existing customers. Most brands, especially e-commerce companies and young brands, can glean much more insight from the data they already possess.

Getting the Most Out of First-Party Data Means Looking Within Customer Visits

The most important thing you can do to make sense of your own data is to not only look at visits to your site, but also at what happens during these visits. Understanding the impact behaviors like putting something in a shopping cart and abandoning it have on your site’s overall shopping experience is imperative when you’re looking to optimize your user journey. This is how you retarget named customers at the individual level.

Once a prospect converts to a customer, you can look back at the pre- and post-purchase touchpoints. A large base of customer data allows you to aggregate information to show you what type of customers are most likely to find value in your product and thus where to invest your advertising dollars.

Understanding which channels and campaigns or products are best at bringing customers who purchase second and subsequent times is also something you should be able to identify from your first-party data. Using this data, you can retarget named customers who haven’t repurchased recently.

Machine learning is making first-party data-driven insights even more powerful, making it simpler to glean insights from what can be an overwhelming amount of data. Implementing products and systems that focus solely on interpreting your first-party data and generating suggestions for how to optimize your spend will allow you to focus on the important part: executing better informed marketing strategies.

Third-Party Data Deprecation Doesn’t Have to Mean Signal Loss

Your best asset when it comes to advertising is already in your hands. First-party data is an invaluable resource that's all too often underutilized. But, when you dig into it, you can really understand and leverage the profiles and journeys of your visitors — especially those who convert to a purchase.

By collecting this data and analyzing behavior from various channels and campaigns, you can focus on understanding your best opportunities. As a result, you can more effectively scale your advertising efforts in a way that saves you time and money while growing your business.

Signal loss doesn't have to be the outcome from the demise of third-party data. First-party data can enhance your ability to increase initial and subsequent purchases and develop a more loyal following. It will also give you a much better picture of which marketing initiatives are working on your site, which are underperforming, and where there's opportunity to find new revenue streams.

Phil Dubois is the CEO and co-founder of AdAmplify, a provider of the next generation of marketing attribution software.