There’s a sweeping generational shift happening across the paid media and advertising space—and it’s been a brutal revelation for marketers.
Consumers are increasingly dissatisfied with the creepy factor of targeted ads and are opting out of third-party tracking
Privacy regulations are limiting the ability to track and store customer data
Browser restrictions on cookies and mobile ad IDs and privacy-first browsers are growing and affecting identity-focused marketing
The “walled gardens” of Amazon, Google, Facebook, and major retailers like Target are making it harder to take data out for use elsewhere, inhibiting cross-channel planning, buying and optimization
Access to data is stratified. The connective tissue of customer identity woven together from third-party sources is becoming weaker as identities become shallower, duplicated, and splintered. The four horsemen of data deprecation have arrived. But it doesn’t have to be the end of the world for your paid media strategy.
Data deprecation is enemy #1
The status quo ways of digital advertising are no longer working the way they used to, and it's affecting the bottom line.
Three ways CMOs are feeling the paid media pinch:
1. Data deprecation threatens nearly every form of online behavioral advertising
The third-party data that the ad ecosystem was built on is decreasing in fidelity. The only reliable data left to marketers to base their strategy on is their own first-party data and publisher’s data (sourced directly or through second-party marketplaces).
2. The media buying ecosystem is being completely reset
Even as effectiveness goes down, costs are still high. The bidding language DMPs/DSPs/ad servers use to communicate in real-time with each other is broken over concerns about customer data leakage.
3. Identity resolution across channels is increasingly difficult
It’s a consequence of the deterioration of third-party data and Apple IDs, and it results in far lower match rates when trying to acquire new customers.
Moving to a first-party data strategy
Advertisers are moving away from inferring behaviors, context, and intent through invasive and sketchy tracking mechanisms. Instead, they’re deploying privacy by design within a first-party data strategy to make sure that data collection is consensual and usage transparent. To this end, they’re:
Implementing tactics to collect data willingly shared by customers (in exchange for some perk)
Exploring alternative digital media buying modalities (Connected TV, streaming)
Pursuing alternative targeting approaches like contextual targeting and matching audiences through publishers' data
Solving the customer identity crisis
Identity resolution is key to building a successful first-party data strategy. But there are very few providers who can actually muster the technical capabilities, legal compliance, and financial wherewithal to deal with data deprecation. While lots of data sounds like a good thing, questions remain—is it accurate? clean? comprehensive?
This is where a critical provider capability comes into play—a unified customer profile. Acting like the brain and memory of the modern digital marketer, it merges identified first-party data into one coherent source of truth that reflects all customer online/offline touchpoints and interactions with a brand, both current and historical. This is especially crucial for larger retailers whose majority of transactions still happen offline or in stores. Marketers can:
Gain a complete and accurate understanding of customer behaviors, preferences, and needs
Develop more personalized and relevant marketing strategies that enhance customer experiences and build relationships (which boosts lifetime value)
Mitigate risks, costs, and time associated with third-party data assets
Measure activation impact on KPIs
By having control of their customer data, businesses can pursue customer-centric planning, mapping, and sequencing paid media interactions to consumer journeys down the funnel. Unifying online and offline data sources also increases first-party data signals.
If other people see the problem, so should you. There's a rupture in the value exchange between brands and consumers. People simply expect better, more transparent use of their personal data, or they’ll rethink engaging with your brand.
Paid media teams that use a first-party data strategy built from unified customer profiles, in privacy-safe ways, stand to make more money by delivering better customer experiences. Some brands are even seeing:
Conversion rates three times better over third-party audiences
Five-fold increases in return on ad spend
Decreased timelines, cost, and risk
If you’d like to learn more about the demise of the old way of reaching customers and the dawning of the first-party-first era, check out our webinar.