6 Ways to Make the Most of First-Party Data
According to McKinsey, most companies are using only a fraction of the customer data in their possession. And it’s no wonder: First-party data is more relevant and cost-effective than data collected from second- and third-party sources, and the rich insights it offers can empower marketers to craft personalized and compelling ad experiences.
But many brands report that ROI on this data has failed to meet expectations. Why are marketers struggling to make the most of their first-party data, and what can they do boost returns?
Drawing on input from brands, agencies, tech providers and publishers, here are six challenges marketers must overcome to make the most of the data they collect on consumers.
1. Accuracy: First-party data is often incomplete and sometimes inaccurate altogether. The pitfalls of inaccurate data are many, ranging from a poor customer experience to wasted spend, with some estimates warning companies could lose an average of 12 percent on revenue.
Brands wanting to make the most of their data need to start by assessing and addressing accuracy. By filtering out inaccurate first-party data or augmenting it with other verified sources, brands can make sure they’re benefiting from a holistic view of their customers and activating only accurate consumer insights.
2. Scale: Though some brands like Facebook and Amazon have accumulated massive amounts of first-party data, others simply don’t have as much. That’s why many are finding it difficult to market at scale without making handsome payments to Facebook and Amazon to “rent” their data.
Brands can address this challenge by employing strategies such as lookalike modeling or employing real-time graph technology to expand reach. Graph technology, for example, uses a set of cookies or device IDs to find and target the same users on other devices, including TVs. Using these strategies and technologies will lead to improved campaign performance and greater ROI.
3. Latency: If a customer is browsing holiday getaways on her desktop at work but stops short of booking, how quickly can advertisers send a follow-up ad to her mobile device? This is the question of latency — the amount of time it takes for a system to update its data so advertisers can act upon it. Whether advertisers want to raise awareness about a brand or encourage a customer to make a purchase, low latency will enable them to reach consumers effectively across devices.