Importance Of First-Party Data In Advertising

Importance and Concerns With First-Party Data in Advertising

Data is the new oil, they say. Obviously, they are talking about oil from the pre-COVID-19 era. Even though oil lost its value and utility to an extent, data has maintained, if not enhanced, its worth. Talking about data in the advertising world, one subset that is often considered more valuable than others is the ‘first-party data’.

In this article, we are discussing why it is so important to the advertising industry, why there are so many concerns about it, and how to address those issues.

What is first-party data? 

As an advertiser, you are the first party. So, the data that you own is first-party data.

If you are an advertiser, you must be offering some service or product, which will get you leads, potential clients, and clients. For service/product delivery, there has to be an exchange of data between you and them. You will be collecting different data points, such as email address, phone number, device ids, and so on. You can gather even more specific information depending on the kind of business you are offering. For example, an app or website can gather details, like how often they visit your app/website and what products they check. 

Such data points play a key role in mapping the user journey and pacing up the conversion in the funnel.

Importance of the first-party data? 

For any marketer, the first-party it probably the greatest possible marketing asset. Not only it allows you to reach the existing customers and potential customers across platforms to push the funnel conversion, but it also gives you the opportunity to upsell and cross-sell. More importantly, since it is the data you have acquired with the permissions of the user, you can apply your data science to figure out deeper behavioral and intent analysis that can help you understand the customers better. 

Moreover, you can partner with Demand Side Platform  (DSPs) and Data Management Platforms (DMPs) to leverage this data to boost your ad campaign exponentially. Some of the benefits of utilizing the first-part data with DSP: 

1. Lookalike Modeling: Lookalike modeling is building an audience that’s similar to your existing audience. So, by building an audience set similar to your existing customer, you can enhance the chances of growing your conversions with the ads. While lifting your conversion, it also brings down the ad expenses as you are targeting only the users who are likely to convert faster. Most of the leading partners, including LinkedIn, Facebook, and RevX are capable of offering this feature. 

1. Enhancing Machine Learning: Machine Learning  (ML) works on improving your ad revenue by collecting and studying the data. If you can feed it the good data, it can understand the patterns in which the user engages more. It can improve the user experience by deploying a customer journey that is able to reach them at the right time over the right format with the right message. 

1. Precision Expertise: Various ad partners already have a massive data set available with there historic campaigns and other sources. They may already have device profiling and user data points. By connecting them with the first-party data, your campaigns can be more focussed. Hence, driving more conversions.

Concerns with it? 

It’s your campaign data. It’s obvious that you would be skeptical while sharing it with any third-party. It could be about how the third party will protect this data, how will they use it, does it conflict your data sharing policies and more.

Here are some practices that you need to follow: 

1. Collect data in authentic ways: While you are asking the potential customer to fill their details, ask for their permission to use it for marketing purposes. If you intend it to you the data with a third-party, mention it in your data privacy policies. 

1. Assess the third-party processes: When you choose an ad partner, look for their data processing processes. How they control data, do they have any affiliation, data compliance policy in place, are they certified by any recognized body for their services. 

Wrapping Up 

Utilizing your first-party data in the ads can do wonders for your campaigns. Unless your choice of ad partner is not able to offer you convincing answers on their data usage policies, you should not share your data with them. However, most of the leading DSPs, DMPs, Ad exchanges, Ad networks, and SSPs have their policies in order. Most of them comply with GDPR and other such regulations. If they are certified and authentic with their approach, you are good to go.