Political strategies

Third-party data is dying, businesses need new strategies

Office building in the City of London. Image by Tim Sandle.

According to Wayne Coburn, product manager at Iterable, consumers want it all. They want tailored and personalized experiences. They want to feel like brands know them personally. They don’t want to be tapped, but they To do want to be in the loop. In addition to these requests, they do not want their personal information shared.

How can companies solve these problems? According to Coburn, there is a way forward, as he explains to Digital diary.

Let’s talk data

Coburn says, “There’s literally no field in the world that doesn’t deal with data. But dealing with data is quite different from mastering data. And before you can master data, you need to know more about data.”

By this, Coburn means:

  • Zero-part data is data that a customer voluntarily gives to a brand. This can be an email address provided in exchange for a discount coupon, but zero-party data also comes from customer profiles and preference settings.
  • First party data This is data that a customer provides to a brand from their actions, such as intents based on browsing the website or applying a brand or adding items to a cart. Since actions speak louder than words, first-party data is usually the most accurate data a marketer has. However, zero and first-party data together represent the most valuable data a brand has about its consumers.
  • Second party data is another company’s first-party data that a brand has access to, usually through a partnership. If the brands are complementary and not competing, then both benefit from the arrangement, and I expect to learn more about second-party data over time.
  • Third party data This is data collected and managed by a company other than the brand, and brands buy this data to augment their own. Although third-party data may contain inaccuracies, it has always been more accessible and cost-effective for brands to purchase data than to collect and maintain it. This is especially true for brands that, for whatever reason, don’t have direct relationships with their customers. I always buy the same brand of toothpaste, and I usually buy it from the same store, but I don’t have (or don’t necessarily want) a deep relationship with Proctor & Gamble.

The list can be daunting for businesses or, as Coburn says, “So many types of data! The more the merrier, right? Bad.”

Instead, Coburn views the mass of data as a problem, noting, “Consumers haven’t known what data companies have been collecting about them (and how they’re using it) for a very long time. To make matters worse, their data was not simply stored, used and discarded. Consumer data has been captured, sold, used and resold. All without the consent (or knowledge) of the consumer. »

For a while, consumers didn’t know what was happening to their data, but not anymore.

The awakening of the consumer

In terms of consumers understanding their data, Coburn recalls, “Remember 2013? It was the year of the FroYo and the Selfie. The vine was fashionable. The Boston bombing and Cleveland kidnapping captivated (and horrified) the world. It was also the year of the Yahoo data breach, which affected 3 billion users, and the MySpace breach, which affected approximately 360 million user accounts. 2013 was not a good year for brands. On the other hand, it was a great year for the Harlem Shake, and the start of what I like to call ‘Consumer Awakening’.

Things are more sophisticated now, notes Coburn: “Fast forward to 2018, the year of the Keto diet, the unicorn cake, and the Cambridge Analytica and Facebook scandal. The high tier: The Times reported that in 2014 contractors and employees of Cambridge Analytica – owned by right-wing donor Robert Mercer – were eager to sell psychological profiles of US voters to political campaigns. They acquired the private Facebook data of tens of millions of users – the largest known leak in Facebook’s history. It wasn’t a good look for social media (or politics).

The result, observes Coburn, is: “Consumers today are not only aware that their data has been (and is being) used, but they want it to stop. Political governing bodies, responsible for the safety of their citizens and at the mercy of public opinion, have reacted fervently by rolling out policies like GDPR and CCPA that restrict the use of consumer data. Brands like Google and Apple, governance heavyweights in their own right, have followed suit.

enlightenment

As reliance on third-party data decreases, how should companies respond?

Coburn says, “If you paid attention to economics, you would know that when supply goes down and demand stays constant, things get…expensive. With the limited data pool and data collection permanently closed, available third-party data will be out of date. “Less effective, more expensive”. Sounds good if you ask me.

As for the situation, Cockburn says, “To recap: rich third-party data is disappearing because consumers want to control their psychological and behavioral patterns. They don’t want their predictions and purchase history sold to the highest bidder. In recent years, discerning consumers have enabled ad blocking on desktop computers and manually disabled third-party tracking cookies (some browsers even disable them by default). And what consumers want, brands and companies deliver.

This means new strategies for businesses. Here, Coburn reassures: “Change is never easy. And while the Consumer awakening is hard to swallow for some, companies that think differently about this challenge benefit; Apple sells privacy as a product, and they find that privacy sells.

Coburn’s latest advice is: “As painful as the loss of the consumer manual is for us as marketers, it’s nothing to complain about. Why postpone the inevitable. It’s time to stop being enraged and start lighting up.