So Long Signal Loss, Time for Data Parties
This is the second in a series of posts where we explore key themes from The Essential Guide to Signal Loss for Digital Marketers.
First, we took a closer look at consumer data privacy and what recent regulations mean for advertisers. Now, we’re digging deeper into how the demise of third party data —tied to the loss of cookies and IDFA— impacts what types of data digital advertisers can work with, another hot topic for marketers today.
In our previous blog post, we reviewed how a host of new legal regulations are strengthening consumer data protection around the world, and how these changes are set to impact businesses of all forms.
At the same time, the loss of cookies and device identifiers that supported much of digital advertising as we know it further restricts what data can be collected and used for marketing purposes. That’s why, in this post, we’re taking a closer look at the different types of data marketers typically work with, and what’s changing.
Demystifying Data Types
The combination of stricter privacy regulations and the loss of third party cookies and IDFA essentially limit what data a business can collect and use about consumers. That situation’s forcing many marketers to rapidly become better acquainted with terms like “third party data” and “zero party data” in order to understand what’s still on the table.
In practice, four types of data have traditionally been available to brands, ranging from zero to third party data. Here’s an overview:
Third Party Data —consumer data that’s gathered, owned, and shared by multiple parties such as ad platforms, publishers, and advertisers— has been all the rage with digital marketers for a while now. It gave rise to a complex ad targeting ecosystem and disciplines like programmatic advertising.
However, as the legal and technical landscape underpinning that ecosystem starts to shift, third party data’s falling out of favor, or will be in increasingly short supply. Second party data —data shared between two parties such as advertisers and publishers for advertising purposes— may suffer a similar fate. That puts first party data squarely in the limelight.
How Third Party Data Got Thorny
Third party data has garnered its fair share of headlines, and it’s one of the reasons why you’re likely reading this post. Recently, things have become a little thorny.
So how did we get here? Third party data is helpful. It can be purchased by advertisers from a variety of sources, and provides a full picture of who someone is, their behavior, and what they do online.
Third party data tracking —supported by a trail of digital cookies and mobile pixels— also helped to fuel the advertising industry. It enabled platforms and marketers to do things like 1:1 ad targeting, and to focus on delivering budgetary efficiencies at scale using specialist bid types on ad exchanges and beyond.
The trouble is, the personal data driving those processes is often collected without consumer consent, and in some cases, without their knowledge. That situation prompted regulatory scrutiny along with some big policy updates by the world’s tech giants.
If that wasn’t enough, it also turns out the picture third party data paints about a consumer isn’t so complete —or accurate for targeting purposes— after all.
First Party Data: The Golden Opportunity
At the other end of the data spectrum, zero and first party data is information brands collect directly from consumers. First party data is drawn from owned and operated websites and channels, which means brands own it, and can act accordingly.
That information leaves marketers on much firmer ground, and with room to experiment. Since zero and first party data is voluntarily shared by consumers in the form of customer feedback, social engagement, survey responses, and the other ways in which a person experiences a brand, it’s also privacy-conscious.
However, that doesn’t mean consumers should be left in the dark about what information is being collected about them. On the contrary, collection of zero and first party data represents an opportunity for brands to be open about data collection and position themselves as consumer advocates.
Whatever your take on that, one thing’s for sure: first party data is paving the way for a new kind of precision-minded advertising that doesn’t rely on cookies, tracking pixels, or breaking the new privacy rules.
And, better yet —and as we’ll explore in our next post— there’s a powerful new kind of first party data that’s also a rich source of information for marketers. It’s called Creative Data, and it enables advertisers to see how every attribute of their creative contributes to performance.
Creative data empowers advertisers to take control of their creative performance despite Signal Loss, and it’s ultimately what leads to Intelligent Creative. Data that’s finally worth celebrating!
In summary, a specific kind of data —third party data— has helped to fuel the rise of performance marketing. While its demise may have led some marketers to question how to move forward, first party data is here to help. Better yet, it’s already led to a new approach to performance advertising that’s both privacy-conscious and designed for data-minded marketers. More on that, coming up in our next post!
Want to read further into data parties and signal loss? Download the full eBook.