From Scavenger to Farmer
Why is first-party data collection important in this day and age?
The easiest way to simplify how to define first-party data is to view it in the mindset that this is your data. You have full access to it and have some authoritative identity tied to it.
Essentially, this data helps you become data independent as you continue to build, assess, and create your own data. Additionally, the data is something you can activate and run analytics on. This enables you and your partners to be more successful in your marketing strategies.
Up until now, most of the world has been operating on third-party data.
Relying on Third-Party Data
A great example of relying on third-party data is for retargeting efforts. Let’s say you want to target a specific audience or demographic. It’s not very likely you would have that information on hand, so you’d need to source it from a third-party provider. One of the largest reasons you might not have that information is that your pool of audience information is limited. Walled gardens, such as Facebook and Google, and publishers often are collecting more information from consumers, due to the nature of their businesses.
You also might receive this information when you’re running online marketing, through certain audience targeting. There is even a case to be made if you’re putting a pixel on your site for Facebook retargeting—you're essentially letting Facebook own those audiences that are being collected for you to market. You can still market to them on Facebook; however, this is still third-party data, since you don’t get to own that audience.
Additionally, you don’t really know who that audience is. It’s just a way to run advertising on Facebook.
Understand the Difference Between First-Party Data and Third-Party Data
These examples highlighted are one of the biggest differences between first-party and third-party data.
The easiest way to simplify this is––since it tends to live in a gray area, as people define the minor parts of the data differently––do you own the audience? Do you have full access to it? Is it yours, regardless of what vendors you may or may not work with in the future?
The Difference Between a Scavenger and a Farmer
The bigger challenge that our entire industry faces––all marketers and therefore all businesses are facing––is a problem of scarcity.
If first-party data is the way to be successful in the future––which seems to be everyone’s accepted answer, whether you’re on news sites and expert articles––how to be successful tends to be fully agreed upon. Scarcity is the main issue preventing the industry from moving forward with first-party data.
No one’s had to focus on or think about the lack of first-party data, since we’ve always been able to get information from a third-party. As privacy has increased, as cookie deprecation has changed, as Apple rolls out privacy updates, such as Ask app not to Track, getting a list of people who are in a specific audience or demographic is no longer as easy.
First-party data has never had to be a strategic initiative for businesses. It wasn’t viewed as the biggest asset.
The way we view it at fullthrottle.ai is as a spectrum, with scavengers on one end and farmers at the other.
If you’re a scavenger, you are viewing the problem of scarcity as if you are in an audience desert and you just need to scavenge to find more.
Scavenging can also apply to third-party data as well. People have been out in the marketplace looking to bring in whatever third-party model data is out there to try and build a “targeted plan.”
If you’re on the opposite side of the spectrum as a farmer, you have already begun to cultivate your processes. You have invested in technology and, as a team, become more of a forum where you own a rich crop of first-party data. You continuously collect and harvest all of that first-party data, giving you a huge competitive advantage as everything leans into first-party data over the coming months and years.
Since brands and agencies are moving into first-party data now as the solution to the previously mentioned industry changes, we encourage businesses to move up to a farmer role, where they’re harvesting more data instead of scavenging for it. This is all to help businesses build up their data independence.
At fullthrottle.ai, we are starting to see smart marketers and companies come to us and begin building that first-party data pool to start farming from it. What’s especially interesting is that they now are finding out there are holes in the first-party data they thought they had.
Most of them believed they were collecting a robust set of information. However, that’s not the case in most instances.
Some questions to get started on your journey to data independence should be:
- What do you currently have in your first-party data collection?
- What information is your data missing?
- What do you have versus what do you want?
- Is the information you have enough?
For most businesses, the easiest first-party data collection to go to would be their previous customers. These are customers who have given you some kind of information, as they’ve bought from you. Whether they’re purchasing a product or receiving a service that you sell, generally you’ll have their information.
That is one huge set of first-party data.
The second is around leads. These are people who are somewhere in the sales process who have given you a bit of identifiable information. If you’re an e-commerce, maybe these leads are people who have signed up for an account but never purchased.
As a scavenger, those are the first two types of data you go after. Now comes the question of what to do with that information.
When you look at the total business snapshot of your opportunity in the market at any given time––the people who have bought from you before and maybe your recent leads––that is still a frighteningly small percentage of your total market opportunity.
Businesses will start to understand that this view of first-party data is not going to get them anywhere near a critical mass so that they’ll have a real asset to take to the market.
Should You Walk Away From Walled Gardens?
Walled gardens are an essential part of any media mix or ad plan. You shouldn’t ignore the walled gardens, if your consumers are there. It’s about creating your own first-party data and creating independence, and then using that with the walled gardens as your partners.
As we begin to understand that scarcity of first-party data means a lack of volume, we can start to look towards gathering the full picture of what is needed to complete first-party data assets.
If we begin to migrate from third-party into first-party and having data independence, does this mean walking away from the walled gardens as opposed to being dependent on them?
There’s a negative connotation around walled gardens within the industry. Some examples are Facebook, Apple, Google, etc. These are important places where consumers are, so we need to invest dollars into these walled gardens.
The problem has always been a lack of insight and not owning the data, which essentially creates a co-dependency. This is where it becomes problematic to use walled gardens.
If you can create your own first-party data set of in-market audiences, you’ll have better results when you bring them to the walled gardens and big media networks, since activation will be more efficient.
We are not advocating walking away completely from walled gardens. What we are advocating is having data independence. This is important to building your own pathway and owning your own first-party experience. Then, you can fold in all the other pieces that are available to you.
Delay in the Cookie Demise
When Google announced its cookie demise delay, many in the industry let out a sigh of relief. However, there is a lot of work companies need to do on their own first-party data.
Typically, as humans, we find it difficult to act ahead of time. Even if there’s a doomsday date in mind, it’s difficult for us to act when we don’t have any day-to-day pain.
For businesses trying to get ahead of the cookie deprecation, we have seen the most progression and momentum around those who are experiencing pain points. Usually, the pain these companies is feeling is around increased cost per acquisitions, increased cost per leads, and the way they can stretch a dollar––which isn’t the same way you could stretch a dollar five years ago, since It's harder to find that audience list.
No matter where you put your media spend, no matter who has the most amazing third-party audiences in the world, it is really difficult to find people with certain behaviors. What ends up happening is that even though Chrome is still using cookies and they’ve extended their cutoff date, there are still a lot of people on iPhones using Safari or Firefox, or even people who have settings on their phone and chrome browser to block tracking. Safari and Firefox have already deprecated cookies, so those using mobile IDs won’t reach that audience.
Those who feel that pain are the ones in the market we’re seeing work towards momentum.
We are also seeing those with clear business plans working towards cookieless options—those who have a three-year plan and know that powerful, quality audiences and first-party data are going to be crucial to being competitive in the coming years.
Anyone can invest in cookieless options—this isn’t a seven-figure capital expenditure plan. It’s more that you have to increase education around it, asking questions and assessing where you are on the first-party data journey.
Some marketers have been very open-minded about leaning into the cookieless space and learning to be proactive with a plan. These marketers are looking at their retargeting and remarketing capabilities to see that their metrics have fallen.
An Advanced Education Around the Identity Landscape
One of the biggest intimidators around data activation is that it feels very complicated. Let’s say you invested in tools and technology.
fullthrottle.ai is a perfect example––we help clients go from scavengers to farmers by helping them with their first-party data.
However, an issue arises if you have first-party data and aren’t sure what to do with it. It’s not enough to own data—you need to activate it. What do you do with this first-party data?
Historically, since needing first-party data hasn’t been an issue, this has been a real pain. You didn’t really have enough first-party data to be able to activate it, so you never had to focus on it. Besides uploading your audiences into Facebook and running a custom audience, which is what most people do, activating this data has been a nightmare for companies. That is, before fullthrottle.ai existed and provided an interoperable solution, making it easy to activate that data through pre-built media pipes.
The Circus Around First-Party Data
A good analogy around activating a first-party data collection is that for many businesses, it feels like running a circus. There were—and are—many situations that had businesses feeling like they were doing jumping jacks and acrobatics and flips just to be able to land their first-party data activation.
This is still the case today. For those who are activating today, they’re likely running into one or more of the companies listed in the graphic below.
You might be an advertiser that’s starting on the left side and you’re doing a great job of creating first-party data. You likely have a CDP (customer data platform) and are keeping your data in one place. From there, you have your third-party data assets, which includes onboarders and universal IDs. Then, you have your clean rooms.
This is expense after expense after expense, just to get your audience to a place where you can run matches on the data.
If you’re a publisher, it’s really the same issue. However, it’s the reverse for the advertiser. You might have subscriptions, people submitting information, and other ways you’re collecting first-party data. As a publisher, you then have to go through a CDP and an onboarder and a universal ID company. You may have to use a clean room to then match that data.
A few years ago, we learned that we had to tackle the activation issue. So, we tackled it fast, in order to convert our clients from scavengers to farmers.
We decided that if we couldn’t make activation very simple, our business wouldn’t go very far. You have to do something with the crops once you become a good farmer.
So, we created the activation highway, where we help deliver first-party household data. We believe it is important to activate these audiences across audio, video, display, etc. We are able to do this with a 90% match rate.
Overall, first-party data collection is still a relatively new investment and there is a lot more to learn and create. Companies need to champion and invest in these technologies to continue to create easier ways to activate first-party data. Otherwise, the vision of first-party data being the future will be short-lived.
First-Party Data Collection Self-Assessment
Some companies might read this article and determine they are all set on their first-party data collection. However, some might still struggle. This is why we have created a first-party data self-assessment.
Understanding the questions on the self-assessment will place you in a very powerful position. As you have these conversations internally with your stakeholders and other team members, this assessment will give you a good sense of where you’d like to go in your data journey.
It will also make you think about your traffic across browsers—especially your specific site. The traffic you have helps change what opportunities you have and can help you decide what technology you invest in, based on what your website traffic actually looks like.
fullthrottle.ai can help you capture and activate your website traffic. Schedule a demo to discover how much you have.