Brands Making Investments See Positive ROI From First-Party Data

Surprising, but true -- brand marketers are only now admitting they see the promise of first-party data in advertising and marketing campaigns. They say it's the foundation of their relationships with customers. A report released Tuesday blames the delay on the unwillingness of companies to invest in data collection and analysis platforms that could qualify raw numbers and quantify results.

Recent and accurate data issues also play a major role. The report from Econsultancy and Signal suggests it is easy to overlook quality issues in outside data, while discrepancies in first-party data are more obvious. Some 36% see a strong positive impact from their data-related marketing investments, while 47% see some positive impact. About 11% see no significant impact or some type of negative impact. Some 6% cannot document the impact.

Kathy Menis, VP of product marketing, said that in the past marketers were very dependent on third-party data, but the survey confirms that first-party data has become a priority for them. "They have cleared the knowledge curve," she said.

A lack of trust becomes the greatest threat to using internal data to drive marketing. Organizations must rely on their numbers and what they mean, or data never makes the leap to information and knowledge, according to the report. How it is categorized, cleansed and processed creates other challenges.

The most important advantage of first-party data is insight to better control campaigns. While data from outside sources can improve the short-term performance of marketing, it can't explain the relationship with customers and their paths to purchase.

Some 82% of North American marketers say they plan to use more first-party data in their campaigns, with none reporting they will decrease their use. One in four marketers said they plan to reduce their use of third-party data.

Some data sources generating the strongest ROI from first-part data include Web sites at 70%, point of sale and CRM at 63%, email at 61%, mobile applications at 60%, call center data at 47%, and beacons at 23%.

Transaction history and customer information are the data most commonly used by all survey respondents. These first-party data types are typically mixed with customer data from trusted partners, which the report refers to as "second-party data," and 63% of organizations seeing strong data-related ROI, but 48% of the mainstream sample.

Behavioral data uses visitor actions to predict future interests and events. The report provides an example of multiple visits to pages with similar content that are typically used to narrow the focus of future content delivery. Behavioral results vary, often due to the complexity of action and intent across an audience beyond the most basic associations.

The report is based on findings from an online survey fielded in May 2015, with a total of 302 respondents. The sample was restricted to companies with at least $100 million in annual revenue. The largest grouping -- a mixture of technology, retail and other sectors -- was those over $1 billion at 41% and $500 million to $1 billion at 22%. 

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