First-party data strategies for advertisers and publishers in the age of privacy

The move to a privacy-first world, driven in large part by Apple, Google and the elimination of third-party cookies, is creating opportunities for all brands as they shift their marketing strategies to align with privacy regulations while working to regain consumer trust.

For advertisers and publishers alike, adopting a first-party data strategy will be critical as they work together to design and measure digital campaigns that accurately target audiences, Joe Root, co-founder and CEO of Permutive, said at the recent Ad Age Next: Health & Wellness virtual event.

“As we see privacy kick into gear, what this means is two things,” Root said. “The first is that any data you touch must be consented to by the individual to whom that data, in essence, belongs. And two, that data, once collected, must be protected. You can't run the risk of that leaking into other ecosystems, into other platforms, because of the way regulation is set up today. What we found is that today’s advertising ecosystem isn't set up for these two realities.”

The problem with many of today’s ad strategies, he said, is that they rely heavily on third-party data, which has been collected by entities that don’t have a direct relationship with the consumers, so their consent is unclear.

“Every time an advertiser buys with data on the open internet, user data is leaking … which is why Apple, Google and others are enforcing these seismic privacy changes that are rippling through the ecosystem,” Root said. “So that sets the backdrop for how brands are having to respond and react.”

First-party data strategies

This is especially critical for health and wellness brands, which have seen a surge in interest as people look for new ways to take care of themselves during the COVID-19 pandemic. But the impulse to flood the market with an advertising blitz to meet this new demand can easily backfire, Root said.

“The health and wellness category is growing rapidly, but the meaning to each individual is very different,” he said. “Broad health and wellness interests range from meditation, to buying a racing bike or signing up to online fitness classes. Clustering these users with the same messages is a wasteful use of resources.” 

Instead, marketers need to pinpoint the right customers to target for different messages. One way to do this? Partnering with publishers and other companies that can offer granular consumer insights built from first-party data in a privacy-safe way. This will allow marketers to develop new personalization tactics that will not only align with privacy regulations as they are more broadly adopted, but also go a long way in restoring consumer trust and interest—something the easier shotgun approach does not do.

“In this very rapidly changing ecosystem, you also risk targeting people who are already into your brand program, perhaps with offers they can't get or incentives to purchase something which they've already bought,” Root said. “It's starting to harm loyal customers and likely starting to erode some of that trust.” 

Direct relationships with publishers

By creating ties with publishers, through trusted networks or direct relationships, brands will be operating in a premium environment, thanks to the data and insights the publishers can provide.

“Partnerships with owners of first-party data provides brands with two things,” Root said. “The first is insights, and the second is the ability to activate against those insights. So there's an awful lot you can learn about your audience by leveraging partner data.”

He pointed out that most of the data used for targeting today already comes from publishers, but it’s delivered through indirect sources. This removes brands from the main source that can provide up-to-the minute data points that range from device at time of day to consumers’ ever-changing interests.

“For someone like Peloton, they can find out that an audience of users who are interested in their products are more likely to be tech-savvy or likely to cook,” Root said. “They can also see where those users are starting to shift toward, … this type of insight can be really useful for learning about the wider interests of your audience. So working directly with publishers gives access to enormously valuable data.”  

Creating a new digital world                                        

For marketers, the old days of digital marketing, measurement and one-to-one personalization are effectively gone. Marketing’s priorities now need to shift to first-party data strategies and building trusted networks of first-party data owners. This gives brands an opportunity to not only gain more control over their advertising but also to rebuild consumer trust in advertising.

“Privacy gives a chance to rebuild, not just the way we handle user data, but also a sustainable digital ecosystem of publishers,” Root said. “The business model has been challenging for a long time, in part because of the structures of advertising. What I'm really excited about is how privacy gives us a chance to reset and ensure that the right people are fairly compensated for the value they create.”