The Dynamic Imperative: Breathing life into first-party data

In the ever-evolving landscape of digital advertising, Google’s decision to deprecate third-party cookies (3PC) had sent shockwaves through the marketing community. Even though the 3PC deprecation deadline has been deferred, because of this seismic shift, brands are scrambling to fortify their data strategies, hastily collecting what they perceive to be the holy grail of marketing insight: first-party data. However, amid this fervour, it's imperative to recognise the dual nature of first-party data, going beyond mere collection of the same to unlock its true potential.

Evolution of first-party data

First-party data is both a treasure trove of insights and a terrain fraught with challenges. While it offers unparalleled direct insights into consumers, it also grapples with issues like data degradation and inaccuracies.

Brands collect information — mobile numbers, email IDs — and celebrate their riches. But a static collection of first-party data, like a mobile number from a past purchase, is akin to having flour without a recipe. It’s useless unless we infuse it with context. In fact, without proper context and dynamic enrichment, first-party data runs the risk of becoming stagnant, irrelevant, and ultimately, obsolete.

The illusion of data riches

At first glance, the collection of first-party data may seem like a triumph for brands. Capturing email addresses, mobile numbers, and other personal identifiers appears to provide a direct line of communication with consumers. Yet, this illusion of data riches quickly fades upon closer inspection. Simply possessing this information does not equate to actionable insights or strategic advantage.

For consumer packaged goods (CPG) and non-e-commerce brands, the continuous tracking of buyer information presents a goldmine of opportunity. Unlike the transient snapshot provided by a one-time purchase, ongoing insights into consumer behaviour offer a panoramic view of preferences, habits, and brand loyalty.

Picture this: instead of merely knowing that someone bought an ice cream once, imagine having a dynamic profile that evolves with each interaction. From purchase frequency to flavour preferences, from seasonal trends to shifting loyalties, every data point adds another layer to the narrative, enabling brands to tailor their strategies with precision. Transactional data that offers a glimpse into a single moment in time lacks the depth and breadth needed to understand the consumer's behaviour, preferences, and journey.

Unlocking continuous insights

Sure, you’ve got the mobile number of a consumer who once bought your product. But do you know how they behave throughout the year? What other brands do they favour? In what quantities do they make purchases? How often do they return? When do they shift their loyalty, and why? These questions hold the key to unlocking actionable insights.

Imagine a CPG marketer proudly boasting about their harvest of a million consumer phone numbers. Impressive, sure, but what does it tell you? Does it reveal which laundry detergents resonate the most with young mothers? When do they typically stock up? Are they susceptible to competitor promotions? Without this dynamic behavioural data, the phone numbers are nothing more than a stagnant pool of data, offering little by way of actionable insight.

Beyond static collection

Dynamic data is the missing ingredient. First-party data isn’t just about collecting static identifiers. It’s about making that information dynamic. Asking consumers to scan QR codes or share their mobile numbers in a value-exchange context may yield initial data points, but real value lies in the continuous appending of buyer information against the brands they engage with. This requires a paradigm shift in approach, from transactional data collection to relationship-building endeavours. It's about fostering a dialogue with consumers, earning their trust, and leveraging data in a manner that enhances their experience instead of intruding upon it. When you act on the basis of such dynamic information on your owned platforms, brands enter into a state of friendly dialogue without pestering the customer. This assists in building the brand, loyalty, and advocacy.

The challenge for CPG and non-e-commerce brands

While e-commerce companies may find it relatively easier to track consumer behaviour throughout the year, the same cannot be said for CPG (where a bulk of sales still happen offline) and non-e-commerce brands. For them, the one-time collection of first-party data quickly loses relevance and value without ongoing insights into consumer behaviour.

The goal is to transform that static phone number / email ID / device ID into a dynamic profile — a rich tapestry woven with behavioural threads that reveals a customer's journey throughout the year. This allows you to not only predict future behaviour but also identify potential shifts in allegiance.

The path forward

So, what's the path forward for brands navigating this landscape? It begins with a fundamental shift in mindset. Rather than viewing first-party data as a static asset, brands must treat it as a living, breathing entity that evolves with the consumer journey. Of course, the journey from static to dynamic first-party data is not without its challenges. Privacy concerns, regulatory compliance, and data governance issues loom large, requiring brands to tread carefully and prioritise transparency and consent. This means looking out for privacy-compliant partners to help with such data, investing in advanced analytics, AI-driven predictive modelling, and real-time data integration capabilities to extract meaningful patterns and trends.

The era of third-party cookies may be coming to an end, but the era of first-party data is just beginning. However, to unlock its true potential, brands must transform raw information into actionable insights that drive strategic decision-making. The future of digital advertising lies in the intelligent utilisation of dynamic, multi-dimensional customer portraits.

(This article of mine was published on www.storyboard18.com )

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Anil Pandit

Executive Vice President

Publicis Media Services