It’s no secret that privacy updates are upending the advertising landscape.
Cookie deprecation alone could cost publishers $10 billion and that’s just publishers!
A study from Google showed 75% of people expect the removal of third-party cookies would have a significant impact on core drivers of performance from audience matching to campaign management to reporting to user acquisition.
Unfortunately, this loss of data is a big deal in the digital advertising space.
Ad targeting becomes much less effective without cookies and click IDs and while platforms like Google and Facebook are turning to AI to build audiences, they are not nearly as accurate as our old audiences.
It’s why advertisers must make a push toward combining what third-party data they have, with first-party data.
Why Rent When You Can Own?
At Ad Universe Summit, Customers.ai founder and CEO Larry Kim introduced the idea of renting vs. owning your data.
The gist of it is that for years, we’ve relied on ad platforms for their pixel-tracking capabilities. We grab their pixel, slot it into our site, and let it feed data back to their servers.
And guess what? It worked!
The problem now is that without cookies and click IDs, the pixels don’t work the same. Match rates often disappoint, there is no data enrichment, and audience sizes are much smaller.
We need to have our own pixel that can capture first-party data, enrich it, and send it back to the ad platforms.
Let’s hear Larry break it down:
By capturing first-party data, you have more control over not only what you do with it, but you also have more data to feed the ad platforms.
First-Party Data is Critical for Ad Audience Targeting
Let me state the obvious – audience targeting is a huge part of ad performance.
The problem is, that if we aren’t able to track users from one website to the next, it’s awfully hard to retarget them or reach them in a cost-effective manner.
Let’s take Performance Max campaigns as an example.
Going back to Ad Universe, both Menachem Ani and Areen Mayelan discussed how with PMax, there is no pure audience targeting. You have to give Google the data on who your target customer is.
That means using the first-party data you have. This can be through a CRM connection, uploading audience lists, or using a tool like Customers.ai to send your data directly to the platform.
Without this first-party data, you will be forced to rely on affinity and in-market audiences, which tend to be very broad.
The more data you can provide the ad platforms, the more targeted you can get.
Whether you are creating new custom audiences or informing the AI audiences within the platform, you want to get as targeted as possible.
Don’t waste money on the wrong audiences.
First-Party Data is Critical for Ad Personalization
A McKinsey study showed companies that excel at personalization generate 40% more revenue from those activities than those that don’t.
That same study shows that personalization can deliver 5 to 8 TIMES the ROI on marketing spend — and lift sales by 10% or more.
Look, we know that personalized ads perform better. We also know that you need data to create personalized ads.
The thing is, the amount of data being captured by ad platforms has shrunk thanks to the privacy updates we mentioned earlier.
The data that used to be picked up by the ad platform pixels is no longer. The majority of it is blocked.
That’s where first-party data comes in.
By capturing first-party data and creating specific audiences based on behavior, you can create really personalized messaging.
That personalized messaging means a better experience, more revenue, and even customer loyalty.
First-Party Data is Critical for Scaling Ad Campaigns
A lot of the sessions at Ad Universe touched on scaling. From how to scale creative to how to scale budgets and so on.
Many of those same sessions also touched on first-party data.
By leveraging insights from your own audience (think purchase history, website interactions, customer feedback), you can refine your targeting strategies to reach similar prospects more accurately.
For example, a SaaS company might use first-party data to identify common characteristics among its most loyal subscribers. They can then scale ad campaigns by creating lookalike audiences and teaching the AI audiences what to look for.
This not only enhances the customer experience but also optimizes ad spend, ensuring that marketing budgets are allocated towards high-converting audiences.
And as campaigns expand, the continuous collection and analysis of first-party data creates a feedback loop that enhances the campaign’s effectiveness over time.
First-Party Data is Critical to Third-Party Data
Ok, that sentence might not make a lot of sense without context. But as we touched on before, the ad platforms are now relying on the data you provide.
And if you can provide the ad platforms with really solid first-party data, the audiences they build based on the third-party data they are able to capture will be much better.
Like we’ve been saying, more data is better.
IPG’s Magna and Acxiom agree. According to their study, combining your first-party and third-party data is actually the best idea!
What’s important to note here is that the reason first-party data has become so important, is that third-party data is gradually becoming less and less.
As marketers and advertisers, we need to stay ahead of the game to ensure our ad campaigns are running at maximum effectiveness.
Are You Ready to Capture First-Party Data for Your Ad Campaigns?
Customers.ai website visitor identification can help you identify 20-30% of your anonymous website visitors.
Those visitors can then be segmented into custom audiences and sent to ad platforms, CRMs, and marketing automation tools.
The result? Let’s look at what others are seeing:
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Important Next Steps
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