2022: The shift to first-party data

First-party data is a bit like getting regular exercise or eating a balanced diet. We have long accepted its importance, but the pandemic has thrown the need for it into even sharper relief.

Third-party tracking cookies have until now formed the backbone of digital advertising and dynamic content. But with Google’s forthcoming sunsetting of the technology (albeit after a stay of execution until 2023) marketers will have to find new ways to be effective in a world without this method of identification. This, in combination with Apple and its fellow tech giants tightening up privacy protections, has reinforced the primacy of first-party data.

Many companies will have already started taking action to collect and, importantly, act on their customer data but 2022 will see this ramped up. Those not paying attention to their first-party data strategy are neglecting a critical asset. Data ownership will be front of mind, with many brands moving towards the inhousing of more of their data and digital capabilities; collaborating with, rather than relying so heavily on, their agencies.

Regulators are also baring their teeth and will put further focus on the ethical collection of that owned data. Marketers may already be thinking this way, with 94% of marketers surveyed as part of Econsultancy’s Future of Marketing Report saying that privacy should be a significant factor in the design of any marketing measurement strategy.

The Fundamentals of Marketing Measurement and Analytics

Back in 2021, Econsultancy’s founder Ashley Friedlein challenged brands and marketers to take a stance on privacy. 2022 will be about putting that into practice, with those embracing good data ethics best placed to succeed in the long term.

Good data ethics is not just about compliance but about establishing genuine relationships with consumers and offering them real value in return for their data. Currently, only 56% of marketers believe their organisation offers a clear value exchange in return for customers sharing their data. Something that the other 44% of brands will need to address, quickly.

The pain of these changes will not be equally felt. B2B2C sectors with historically little direct interaction with their customers, such as some FMCG and automotive brands, will have to do some deep thinking about how to create these valuable relationships.

The value of that direct customer relationship and the data it yields, which can be applied more broadly across multiple channels, is driving much of the interest in D2C. This, alongside the pandemic’s effect on the consumer’s openness to these propositions, makes D2C one of the other key trends for 2022.

First-party data is not just about advertising efficiency but providing value to the customer through recognising their preferences. For those that get it right the results are impressive. Showcasing this is Sky, which leveraged its customer viewing data – 1.6 billion rows of it – to target customers who were most likely to cancel their subscription, tailoring messages based on people’s proximity to the end of their current contract and summarising the content these customers had enjoyed over the past 12 months. In a trial, now more broadly rolled out, the hyper-personalised email led to a 64% uplift in click rate and a 3% increase in conversions.

The approaching post-third-party-cookie world will have consequences for the media landscape as well, putting publishers with logged-in users in a strong position to offer valuable inventory – connecting brands to customers within their own walled gardens. Similarly, retailers are looking to better monetise the data they hold on their customers. Boston Consulting Group estimate the opportunity for retail media at $100bn and retailers such as Tesco, Walmart and Boots are all leveraging their customer data via media offerings. The benefits for both sides are clear. Retailers open up new high-margin revenue streams and brands get access to first-party data, down to the individual customer and SKU level. In 2022 ecommerce shoppers can expect to see more adverts inside their shopping carts.

The challenge of the new data and privacy environment is partnered with a sense of optimism about what it will mean for the future. There is an anticipation that these changes, enforced by external factors, may lead to more customer-centric marketing behaviours and improved customer experiences. Brand health depends on a better data-value exchange with customers.