Creating a robust first-party data strategy while simultaneously harnessing the power of third-party

Introduction

It all began with the Cambridge Analytica scandal:

In 2014, researcher Aleksandr Kogan created "thisisyourdigitallife," an app that collected user data, including data from friends, without consent. This data was sold to Cambridge Analytica, leading to targeted political ads during the 2016 US presidential election.

The Cambridge Analytica scandal surfaced in 2018 when The Guardian reported it and was a major wake-up call for the data-driven marketing industry. It showed how easily personal data could be collected and used without people's knowledge or consent. In the wake of the scandal, there was a renewed focus on privacy and transparency in data collection.

It also led to a shift in the way that ads are targeted. Previously, ads were often targeted based on a user's demographics or interests. This was known as semantic targeting. However, semantic targeting can be inaccurate and can lead to ads being shown to people who are not actually interested in the product or service being advertised.

Brands have now switched to contextual targeting. Contextual targeting means that ads are shown to people based on the content that they are currently viewing.

. Impact of The Cambridge Analytica scandal

1. The US Federal Trade Commission fined Facebook $5 billion. Cambridge Analytica was dissolved. The scandal also led to a loss of trust in Facebook and other social media, people were concerned about how their data was being collected and used.
2. Shift towards opt-in consent: As a response to the scandal, there has been a push for companies to adopt opt-in consent models, where users have more control over their data and explicitly grant permission for its use in advertising targeting.
3. Therefore, the scandal had a significant impact on the valuation of trade desks that dealt with third-party data/ cookies. Some called it the end of programmatic advertising, leading to a decline in the demand and a decrease in the valuations of trade desks and these companies were up for M&A.
4. The scandal popularized the distinction between first-party and third-party data. It highlighted the importance of data privacy and ethics in data collection and its use in campaigns

The scandal and its Impact on third-party cookies/ programmatic advertising

1. Third-party cookies were being used to track users' behavior across multiple websites and serve them targeted ads that are relevant to their interests. With the phasing out of third-party cookies, advertisers and publishers needed to find new ways to reach consumers and monetize their content.

Google recently announced the phasing out of its Similar Audiences feature in May 2023, for the same reasons discussed earlier. This means that brands will have to adjust their targeting strategies and explore options like Audience Expansion and Customer match to reach potential customers more effectively.

The Shift towards First-Party Data

Difference between 1st Party & 3rd Party Cookies from an ad POV?

Difference in Information

1. Passwords: First-party cookies can store login information and passwords, so users don't have to enter them every time they visit a website.
2. User behavior on the website: First-party cookies can track how users interact with a website, such as which pages they visit, how long they stay on each page, and what actions they take.
3. Basic analytics: First-party cookies can collect basic analytics data, such as the number of visitors to a website, the time spent on the website, and the bounce rate.
4. User preferences: First-party cookies can remember user preferences, such as language settings, font size, and color scheme.

Application1 first-party data to capture demand and convert ?

1. Personalization: Not everyone is ready to make a purchase, and in fact, most people aren't. This hesitation usually stems from two main reasons: lack of trust and lack of understanding (and occasionally, insufficient funds). Use first-party cookies to personalize the user experience based on preferences. Building trust is easier when people connect with other individuals.
2. High intent vs Low Intent audience - Programming onsite messaging (Pop-up boxes / Notification bars/ Exit-intent boxes These are programmed for  high intent and low intent audiences - i.e. brands can adjust Tripwires accordingly, i.e High intent audience = do not offer Tripwire, Low intent audience convert using one.
3. Retargeting: Display ads to previous users to capture demand & Convert. Same Logic as above.
4. Lookalike Modeling: Identify potential customers similar to existing ones using first-party cookies. Google Customer match for e.g.
5. Contextual Targeting: Show relevant ads based on user engagement with content.
6. Cross-Channel Tracking: Cookies can track user activities across different channels and devices, allowing marketers to understand the customer journey and capture demand across various touchpoints.
7. Conversion Tracking: Cookies can be used to track conversions, such as purchases, form submissions, or other desired actions.
8. KPI - What % of traffic should convert into a list? The percentage of webtraffic that should convert into a list depends on various factors, such as the industry, the target audience, and the brand's goals. However, a conversion rate of 2-5% is considered average for email sign-ups.

Application 2 - How can you use 1st-party data to scale?

Here are some ways to use first-party cookie data to build a list:

1. Offer incentives: Brands can offer incentives such as discounts, or early access to new products to encourage users to sign up for their email list.
2. Use pop-ups: Brands can use pop-ups to ask users to sign up for their email list. (can be triggered by user behavior, such as scrolling or clicking on a specific page element).
3. Optimize landing pages:  Generative AI landing page tools that work with first-party data and programmatic advertising for e-commerce: to encourage users to sign up for their email list.
4. PerformanceMax - Use first-party data through Customer Match lists, set up conversion tags, and use Google's auto-detection method to identify new customers

Hotels and First Party data strategy

A study by Sojern, found that nearly 61% of hotel brands have implemented a first-party data strategy, Where are you on the Curve?

Steos to collect first party data

1. Use a subdomain: You can create a subdomain that is owned and controlled by your organization to collect first-party cookies. .
2. Use a tag manager: A tag manager is a tool that allows you to manage and deploy marketing and analytics tags on your website. By using a tag manager, you can create and manage first-party cookies that track user behavior and preferences
3. Use a consent management platform: A consent management platform (CMP) is a tool that allows you to obtain user consent for data collection and usage. By using a CMP, you can ensure that you obtain proper user consent before collecting and using their data for first-party cookies

Tarun Goyal is helping us transfer first-party cookie data from #simplotel to our servers via an API as the bridge that facilitates this data exchange.

Here's how the process works:

• Data Collection on the Website & Booking engine (this include website and Meta traffic
• Simplotel has tools / scripts that capture and collect first-party cookie data from visitors. When it comes to the Booking engine this data is usually stored on the booking engine server
• API Integration To transfer this first-party cookie data from Simplotel to our via API integration. (API serves as the link between the two systems, enabling the secure transfer of data)..

Leveraging Third-Party Data to Strengthen First-Party Strategy

If hotels do not have a first-party data strategy, they can use ADARA third-party data to develop a robust first-party data strategy.

1. When a hotel company has a partnership with a travel marketplace data system like Adara - A RateGain Company , that provides hotels access to anonymized traveler data based on consumers' industry relevant online travel search and booking behavior. Depending on portfolio one should choose the 3rd party data source, I would pick a focussed hotel data stream for resorts that have domestic focus, and Adara for Large luxury hotels that will have a customer match with GDS and TMC data.
2. ADARA can help hotels collect and analyze third-party data to create a more comprehensive view of their website visitors
3. Combine third-party data with first-party data: Hotels can combine third-party data from ADARA with their own first-party data to create a more complete picture of their guests. Now use consent management platforms to convert that into first party data

• For example, if a user has previously visited a hotel's website and expressed an interest in booking a room, the hotel can use this information to show the user targeted ads for that hotel on other websites.
• This is an example of how #thirdpartycookies can be converted into #firstpartydata. By partnering with a #datamarketplace, hotels can access information about their customers that they would not otherwise be able to collect. Check out Chinmai Sharma Post.
• Marketing Execution today is easier than it was ever before and its only going to get better with Generative AI and programmatic advertising converging, what will matter is industry experience creativity and strategy, and keeping it simple, and we all know that...

Conclusion

• Generative AI and programmatic advertising are revolutionizing marketing execution by dismantling the barriers of coding and breaking down silos.(Google is experimenting every day!)
• Databases are now expanding into new dimensions, accommodating tens of thousands of diverse elements within their structures.
• This is a great opportunity to leverage industry experience, creativity, and strategy, draw insights, make it easier for real-time analysis and production,
• First party data is key to success in the data driven marketing landscape,