GrowthDecember 5, 2022

How to use first-party data for programmatic advertising

The demise of third-party cookies is fundamentally changing the way marketing teams are approaching programmatic advertising. We recently spoke with Sean Oakley, Director of Data Product Management at NBCUniversal Media, about how he's navigating the market shift and developing a programmatic advertising strategy based on first-party data strategy.

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For advertisers and marketers today, success means getting the right message in front of the right person at just the right time. To do so, many brands have used programmatic advertising to automate targeting and ad buying, with the goal of acquiring new users and retargeting existing users as efficiently as possible.

But here’s the thing: programmatic campaigns have historically relied on third-party cookies. And the future of third-party cookies is not looking to promising.

We recently spoke with Sean Oakley, Director of Data Product Management at NBCUniversal, about the history of online advertising, the current transition away from third-party cookies, and what this shift means for advertising. Sean leads the ad tech practice for NBCUniversal’s streaming service, Peacock, and is currently focused on helping lead Peacock’s shift to first-party data strategy, building high-impact programmatic campaigns that align with industry regulations.

In this post, we’ll break down some of the key lessons shared by Sean that you can use to adapt your advertising strategy to the era of first-party data. If you’re interested in listening to the full conversation, you can check it out here.

Third-party cookies are going away

There’s been a lot of talk recently about the death of third-party cookies and what new technology will take their place. Third-party cookies have been a huge part of digital advertising over the last decade, as they allow ad networks like Facebook and Google, and more to identify a user’s website visit, track that user's behavior across multiple websites, and then use the data collected to better target ads on their own site. Without third-party cookies, there’s a disconnect between a user's behavior on a brand’s owned website and behavior on touchpoints the brand doesn’t own. This disconnect leaves advertisers with a smaller set of data on each customer, making it more difficult to deliver personalized experiences. It also makes it more difficult to measure the impact of a campaign, as an ad shown on one touchpoint may become disconnected from a conversion that takes place on another touchpoint.

Sean explains that when the lion’s share of advertising moved to digital, third-party cookies revolutionized marketers’ ability to both target more relevant audiences and measure the impact of ads on online and offline conversions. Cookies have been a major driver of new ad tech, like programmatic advertising, that has allowed advertisers to more efficiently allocate spend.

But over time, consumers have become more sensitive to data tracking, and government regulations have begun to introduce legislation that limits third-party data usage.

The European Union instituted the first broad data privacy law—the General Data Protection Regulation (GDPR)—which established consent requirements and other key rights for data subjects in 2018. A patchwork of U.S. states have since passed similar regulations—including the California Consumer Privacy Act (CCPA) in California and the Stop Hacks and Improve Electronic Data Security (SHIELD) Act in New York State—with federal legislation expected to come in the near future.

These shifts have forced marketers to invest in alternative methods for acquiring new customers and increasing customer lifetime value.

How to move forward with first-party data

The answer, according to Sean, is to ”take first-party data and leverage it to inform media buying and to reach the right audiences.” Sounds simple, but isn't always so easy in practice.

First-party data is information that your customers provide directly to your organization through sources owned by your company. These sources could be online channels, like websites, apps, and interactions with digital paid ads, as well as offline channels, like point-of-sale and after-sale contact. Customers produce first-party data directly when they fill out forms on a website or create a user profile on an app, and indirectly when they make purchases, browse content, or take other actions on any of your company’s digital touchpoints.

In lieu of access to third-party cookies, marketing teams can leverage first-party data to inform ad buying and targeting. In comparison with third-party data, first-party data sets tend to be smaller in breadth, as they only encompass data collected from your owned properties, but greater in depth and accuracy, as they allow for more control over the information that is being collected. These differences create certain challenges and opportunities when transitioning from third-party data-based advertising to first-party data-based advertising.

The challenges of first-party data programmatic advertising

The biggest challenge with first-party data lies in unifying data across systems and solving for identity resolution. Your website, your app, and your in-store point-of-sale system may have identified a given customer with different identifiers, but how do you associate those identifiers to an individual profile? How do you put a name (or an email address or a phone number) to these users and determine they’re the same person, so you can deliver personalized ad experiences?

“If you’re User A on my website and you’re User B on Facebook, how do I connect those dots? This is where a lot of the industry has been focusing on the past few years,” Sean explained. “How can I stitch together this person across different publishers, so that we can serve them ads. But also do it in a privacy safe-way, so that when I send that list to Facebook, Facebook isn’t keeping that data.”

Connecting those two data sets—”getting the handshake right,” as Sean puts it—is key to both showing customers the right message at the right time and measuring the impact of that message on conversion.

The other side of that challenge is doing all this in a way that respects consumer privacy, complies with the myriad of evolving, overlapping governmental regulations, and supports data governance. As we’ll dive into next, building and maintaining customer trust is vital for every first-party data strategy, and protecting consumer privacy is a big part of that.

That means ensuring your customer data is stored securely, sharing data with external systems in a way that maintains privacy, and managing data governance and deletion requests.

Prioritizing the customer relationship

Implementing a first-party data programmatic advertising strategy may require technical investment, but it also provides an opportunity to build closer relationships with your customers. 

Sean’s advice? Focus on the customer relationship: “First-party data strategy to me is all about the relationship with a customer.”

When you collect first-party customer data directly from customers, your customers have more visibility into and control over the data they share with your brand. That’s a good thing! But it does mean your brand needs to offer a sufficient enough value exchange that customers believe sharing their data is worth it.

There are two sides to maintaining that value exchange: delivering a better experience and building trust. Your customers need to be able to trust that, if they share their data with your brand, you’ll use it in a way that ultimately benefits them. You can build that trust by:

  • Prioritizing data privacy
  • Ensuring any personalization you deliver is highly-relevant for customers
  • Delivering timely, real-time experiences

There are “different strategies for different organizations,” host Abhi Seeth pointed out, “but the fundamental crux of this is really being able to engage your direct consumers and giving them a meaningful reason to engage back right.”

Looking forward

We’re already seeing the decline of third-party cookies, and a cookieless world is well within sight. That’s why it’s vital for brands to get prepared now—to continue to deliver high-impact programmatic ad campaigns in a way that solves for the measurement and data privacy challenges of a world without third-party cookies.

For an in-depth tutorial on how to build your first-party data strategy and use first-party data to improve not only advertising, but also other data-driven initiatives such as message personalization and analytics, you can check out the recording of mParticle Education Series: How to build your first-party data strategy.

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