The First-Party Data Feedback Loop.
Demystifying the true value behind customer data.
Every marketing and advertising practitioner knows it; third-party cookies are going away (eventually), and other anonymous user identifiers are following suit. Meanwhile, the smartest people in the industry are working hard to innovate and present solutions that will solve for one or more challenges posed by this seismic shift in the industry. Tactics such as advanced contextual targeting and unified/federated identifiers are hot topics right now, with marketers trying to understand the USPs and best use-cases for each type of solution.
In this moment of great uncertainty, there is one thing that is crystal clear and certain to all; first-party data is more important than ever for any organisation in any vertical. Whether you are a marketer in FMCG, travel, or insurance trying to optimise your KPIs, or a media company aiming to increase subscription and retention rates, The marketing battle of the future (and frankly the present) will be fought based on the number and the quality of the direct customer relationships available in your arsenal.
First-party data has a key role to play in every stage of the customer journey and across any channel, both media and direct. You can leverage first-party data to generate customer insights to inform your media prospecting strategy, build lookalike models, re-engage with customers via social or email, provide personalised offers via text, and tailor their experiences on your online properties whenever they come back. And that’s just scratching the surface. Think about connected TV, and the data-driven opportunities that this new channel will bring to marketers as budgets shift from linear to connected TV advertising, including the ability to target your own costumers – it all lies within having a direct relationship with them.
Despite the clear business value of designing and executing a first-party data strategy, many data-driven marketers still struggle to bring the wider organisation on board with their vision, and find resistance from decision makers (and often budget owners) who prefer a more traditional approach to marketing and advertising. And so we need to start shouting from the roof tops about why it is so important to be heading towards a customer-centric future.
The first-party data feedback loop/virtuous cycle is a great starting point for showcasing in very simple and clear terms the value that customer data brings to the whole marketing organisation:
The story of the 1st party data feedback loop/virtuous cycle goes something like this:
- Collecting customer data
Digital marketing campaigns (across owned, earned and paid channels) as well as offline/physical marketing activation can serve the double purpose of putting the brand message in front of relevant eyeballs, as well as collecting first-party data. There are many tactics that can be deployed to collect customer data, including promotions, gamification, surveys, and more. We will cover more of these tactics in detail in a future blog post. The most important point to realise is, that even if your brand does not have an e-commerce or D2C strategy, there is plenty of opportunities to build first-party relationships with customers at scale
- Generating valuable insights
First-party data is analysed and modelled in order to provide valuable and actionable insights on customers. These insights help to understand the most receptive and engaged customers with your brand, how to predict behaviours and finding new audiences with similar characteristics. These insights and predictions can certainly be used in your cross-channel marketing activation strategy, but the most far-sighted data-driven marketers will also make sure to share these insights upstream with the right stakeholders so that they can be incorporated in the development of holistic campaign briefs, and in some cases fed into the product development cycle too.
- Informing targeting & creative
Insights can be put into practice, defining accurate audience segmentation and the right creative assets that will best resonate with different types of customers across media, social, email, mobile and all other available touch points that have a role to play in your channel mix. Insights can also be applied to non-addressable marketing channels, for example informing the planning and asset creation of traditional TV, print and OOH channels.
The link between audience segmentation and creative execution is very key here, and an area where many companies are still struggling to execute. Even the largest investment in data & technology and the most sophisticated approach to cross-channel audience segmentation will not generate significant ROI, unless it is fully aligned with an equally data-driven creative personalisation approach.
- More efficient marketing investment
As a result of the previous steps, marketing activity (both media and direct) is continuously refined using the insights driven by 1st party data, investment is more efficient, and increasing volumes of customer relationships allow for more personalised communications at scale.
If designed and applied correctly, this process results in the creation of a virtuous cycle, with more customer data generating better insights, which in turn results in better segmentation and creation of personalised creative assets which will increase overall performance of marketing activity. All resulting in marketers confidently increasing their investment in data generative initiatives across all touch points, which will keep fuelling their first-party data strategy.
At Silverbullet, we have spent many years helping marketers designing, democratising and executing bespoke customer data strategies for their business. If you want to find out more about our experience and approach, feel free to get in touch for a virtual coffee at email@example.com.