Back to the future for first party data?

GDPR and the wider societal focus on user privacy has rendered third party data fraught with complications. How can businesses harness user data without coming across as ‘sneaky’?

It’s time we accept that notice has finally been served on third party cookies and web tracking. If we believe as marketers that this information is vital to us, then it’s clear that we need to develop alternative means of collecting the information that we require.

The evolution of ITP shows that, for many, the first response to such changes is to search for workarounds, backdoors and other technical solutions. Hence we saw the relationship between first and third party cookies wilfully blurred in order to bypass the new rules. Which were then tightened. And bypassed. And tightened. And so on.

To me, that is as clear an example as any of a wilful disregard for today’s operating environment. It demonstrates a narrow focus on short-term performance at the expense of long-term strategy and the need for cultural change in the digital marketing industry. 

A new landscape

As an industry, we need to embrace the challenges and opportunities of this new operating environment. We need to recognise the major issues surrounding our digital society, recognise how we have got to where we are today, and rediscover our role as the voice of the customer in business. 

This was, after all, why we spent so many years arguing for marketers to have a place in the boardroom. Businesses need to shift their focus from operations and products to customers and markets. The marketer aims to put the customer at the heart of the business, and we all aspire to be customer-centric organisations. 

The explosion of social media in the 2000s gave this a new momentum. We saw businesses develop customer control rooms with impressive dashboard visualisations showing real-time customer feedback from across the globe (e.g. Gatorade Mission Control). The premise here was that real-time customer visibility would drive rapid response and resolution. 

By contrast, we can also see a parallel path in social media analytics. Scandals have included unethical psychological experimentation on users by Facebook, a series which culminated in the Cambridge Analytica debacle. 

Personalisation needs a reboot

Today’s opportunity is to rediscover the original, authentic spirit of customer centricity in an open, transparent and ethical manner. We can offer choice and control to the individual consumer, while protecting their personal data and adopting a privacy by design ethos. Oh, and we need to do that while continuing to deliver the personalisation and relevance that consumers value.

And that is one of the key questions of this new privacy era – how can we best balance personalisation with privacy?

One approach is to develop a new, collective digital ID solution, as espoused by the IAB and others. Another is to reboot our approach to customer data collection and to focus on collecting first (or even zero) party data over third party data. 

Realising the value of first party data

So, what is first party data? Essentially, it is data freely and willingly shared by consumers with organisations. The creation of the zero party data moniker was a way of differentiating between discretely capturing digital trace data and explicitly collecting information from customers.

This approach immediately helps to address issues surrounding the quality of third party data. Market research firm Dynata, for example, highlight two quality issues in particular – lack of clarity in data aggregation practices and lack of transparency as to the provenance of third party datasets.

Of course, the squeeze on third party data availability is not only due to new policies and regulations. It is also a consequence of the steps taken by the digital giants including Amazon, Facebook and Google to create a walled garden around their platforms. By contrast, Dynata propose an Open Garden approach to the integration of first party data.

The future is cookieless 

How this all evolves will be fascinating to see. Industry title Campaign reports that 96% of marketers claim to be ready to target without third party cookies, while also believing that they are leveraging less than 50% of their first party data’s potential.  

As such, many marketers are working with consultants and other third parties to make more effective use of cookieless solutions. Techniques like contextual targeting are used to optimise first party data strategies and to develop data profile solutions, including consent-based data platforms. We are also seeing a shift in emphasis from data management platforms toward customer data platforms. 

Publicis UK Managing Director, Paul Kasamias, sums today’s digital marketing situation up nicely:

“The industry is truly in a state of flux and today’s solutions are unlikely to remain the holy grail”

Keeping up with consumer demands 

Many digital marketers remain sceptical as to how seriously consumer privacy concerns should be taken, relative to their perception of the digital value exchange. This is a great opportunity, though, to both develop new solutions and to build new relationships with our customers and consumers. 

The ODI and RSA released the results of an interesting research project in November 2019. One question asked UK consumers to choose (from a list) which actions would indicate that an organisation had an ethical approach to personal data collection. The results are shown below:

As you can see, UK consumers aren’t asking for too much, are they? Limiting data collection is a no-brainer and is effectively mandated by the GDPR. Equally, providing information as to how data is being processed and who it may be shared with are both under the aegis of GDPR.

The final suggestion – asking people for their opinion on how their personal data is being used – is music to this writer’s ears. It neatly summarises the cultural shift required to succeed in this brave new marketing world. It’s no longer smart to be covert. It pays to be open and transparent.

Only in this way will we (re)build the confidence and trust of our customers and so realise the benefits of opportunities including Open Banking, for example. 

Welcome to the future. The 2020s are our time to build the web that we want to bequeath to future generations. We look forward to working with our customers and partners to develop the best possible solutions.

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